Silver Takes First Place for This Mining Co.

Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCMKTS; LLJ:FSE) has of seven drill holes established on the La Romanera deposit. Five drill holes (LR060, LR075, LR108, LR111 and LR116) were located in the upper central region, which is dominated by polymetallic massive sulfides.

Emerita Resources Corp. describes itself as a natural resources company based in Europe, and primarily focused on Spain. The company is headquartered in Sevilla, Spain, with a branch office in Toronto, Canada. The company has several claims along the Iberian Belt West project, including La Romanera, La Infanta, and El Cura, all of which are open for expansion, both on the surface and at depth.

Drill Results

Gold, silver, and copper are concentrated within this region of the deposit announced. Two holes (LR106 and LR107) are located in the lower central area, which is similar to the upper central region.

Ahead of the Herd has suggested that silver could overtake gold’s value. 

However, "they represent some of the higher grade and thickest intercepts drilled to date and remain open for further expansion of the deposit at depth . . . The excellent gold and silver grades are expected to add significant value to the deposit.

These results will be included in our maiden resource estimate," said Ian Parkinson, the Executive Vice President of Corporate Development for Emerita.

Emerita reports the following results for each hole:

• Drill hole LR060’s lower lens found 0.6% copper (Cu), 0.6% lead (Pb), 1.3% zinc (Zn), 1.74 g/t gold (Au), and 33.3 g/t silver (Ag). Over 4.0m from 242.2m, it encountered 0.9% Cu, 2.0% Pb, 8.1% Zn, 3.46 g/t Au, and 42.5 g/t Ag. At 256.5m, it encountered 9.0m of mineralization, including 1.4% Cu, 0.9% Pb, 2.0% Zn, 2.83 g/t Au and 47.8 g/t Ag.
• The upper lens intersected 3.3m of mineralization at 195.4m, including 0.1% Cu, 1.6% Pb, 3.7% Zn, 0.68 g/t Au, and 68.6 g/t Ag.
• Drill hole LR075 intersected 19.4m of mineralization at 125.2m, including 0.2% Cu, 3.1% Pb, 6.4% Zn, 2.28% g/t Au, and 118.6 g/t Ag.
• Drill hole LR108 intersected 13.6m grading at 102.4m, including 0.3% Cu, 2.4% Pb, 5.9% Zn, 2.12 g/t Au, and 138.5 g/t Ag.
• Drill hole LR111 intersected 46.6m of mineralization at 167.7m, including 0.3% Cu, 1.7% Pb, 2.7% Zn, 4.21 g/t Au, and 84.4 g/t Ag. The highlight of these results are 0.5% Cu, 2.4% Pb, 0.7% Zn, 9.29 g/t Au, and 214.7 Ag over 6.0m. This drill hole also encountered 0.3% Cu, 5.1% Pb, 7.4% Zn, 6.40 g/t Au, and 162.74.5 g/t Ag over 3.1m.
• Drill hole LR116 intersected mineralization at 119.8m down over 5.3m, including 0.4% Cu, 0.5% Pb, 1.8% Zn, 0.92 g/t Au, and 70.2 g/t Ag.
• Drill hole LR106 intersected 15.6m of mineralization at 493.8m, including 0.3% Cu, 1.5% Pb, 2.8% Zn, 1. g/t Au and 100.1 g/t Ag, with 0.3% Cu, 4.0% Pb, 9.4% Zn, 2.2 g/t Au, and 2365 g/t over 3.8m of grading.
• Drill hole LR107’s lower lens intersected 32.0m of mineralization at 637.6m. The lower lens found 0.4% Cu, 3.6% Pb, 8.2% Zn, 1.9 g/t Au, and 119.7 g/t Ag, including 0.2% Cu, 4.9% Pb, 10.7% Zn, 2.7 g/t Au, and 191.1 g/t Ag over 12.7m at 640.9m.

The drilling results were dominated by findings of silver, with smaller amounts of gold and other metals. Emerita has some drill holes where the assay has not been reported yet: LR029 and LR027.

Why Silver and Gold?

While it did not dominate Emerita's results, gold was a noteworthy find.

According to Reuben latest U.S. Fed decision to raise rates by just 0.25% was great news for stock markets, and also gold." Though markets for gold have been rocky as of late, Adams reports that "gold seems poised to consolidate around the US$1900 level before it can make a run at the US$2000 level."

While the future of gold is not dire, Rick Mills of Ahead of the Herd has suggested that silver could overtake gold’s value. Mills discusses two factors that could increase the value of silver: its use in energy, since "CME Group reports that 114 million troy ounces were used to create solar panels, and demand for silver used in batteries and electronics has doubled since the ‘90s," and the metal’s relationship to growth in the Chinese market.

According to Mills, "short-term changes in the gold-silver ratio appear to follow the pace of growth in China’s industrial sector . . .  the [Li Keqiang Index] shows exceptionally strong positive correlations with the prices of many commodities one-year forward."

Catalyst: Completion of 70k Meter Drill Program

Emerita expects to complete its 70,000-meter drill program focused on La Romanera and La Infanta by the end of the first quarter of 2023. Emerita has over 30 drill holes waiting for lab results and over thirty more that will be drilled before their maiden resource update in Q1 of 2023.

Additionally, the historically high grade at La Romanera has not yet been drilled, and Emerita anticipates that they will find wide massive sulfide hits in the next few months. Their other claim, La Infanta, carries the potential for excellent results from deep drilling (approximately 400m depth). Romanera and Infanta are both open to expansion, which increases the possibility of greater returns from both sites over time.

Research Capital estimated in 2022 that the criminal trial over the Aznalcóllar tender will wrap up in three years, and the court will take between six and 18 months to render its decision. 

As for short-term catalysts, Emerita has recently hired Ian Parkinson as the Sr. VP of Corporate Development and Capital Markets. Parkinson has experience as the former Managing Director of Stifel GMP.

He also has experience as a sell-side mining analyst that goes back to 2006. He had a decade-long career with Falconbridge and Noranda and extensive experience with exploration, development, and commercial interests in the industry.

Emerita currently has 15 drill rigs turning, and their goal is 20Mt+ high-grade polymetallic deposits. Emerita has also received a resource update in Q2/23, and based on the findings of that report and metallurgical testing results, they plan to accelerate advancements at IBW. Environmental baseline studies were completed last year in April, and they plan to apply for an exploitation permit in Q2 of this year.

Aznalcollar Court Case

Emerita expects to settle the court case regarding Aznalcollar public tender in Q2 2025. Aznalcollar contains 73Mt of historical reserves of zinc in the Los Frailes deposit, and in addition to the original mine, one other mineralized zone has not yet been drilled.

Between Emerita’s El Cura and La Infanta claims, a new alteration zone has been discovered, and new information suggests that El Cura may hide a high-grade copper deposit, which will be drilled in Q1 of 2023.

Research Capital estimated in 2022 that the criminal trial over the Aznalcóllar tender will wrap up in three years, and the court will take between six and 18 months to render its decision. At the time, Schatzker of Research Capital pointed out that if Aznalcóllar were not included in the model, Research Capital's target price on Emerita would be CA$0.90 per share, implying a return of about 50%.

Ownership and Share Structure

Management, insiders, and directors own a total of 11,443,927 shares, 14,790,000 options, and 353,400. As for institutions, Eric Sprott owns 20.5 million shares, adding up to 10%, and Merk Investments LLC owns 2.56 million shares, totaling 1.3%. Emerita reports no strategic investors.

Emerita has CA$23.63 million in the bank as of June 30, 2022. They report no monthly burn rate or monthly drilling cost.

The company does not work with any IR firms but does work with several influencers, including Johnny Lambo and Doc Jones.

Doc Jones, in response to Emerita's announcement of assay results in early March of 2023, responded, "hitting it out of the ballpark both in grade and width. Expands and upgrades historical resource."

Doc Jones will be conducting a fireside chat with CEO David Gower on March 21^st at 10:20 am EST. Varun Arora of Clarus Securities and Adam Schatzker of Research Capital also provided analysis and news coverage of the company.

Emerita has a market cap of CA$166 million, with 207.32 million shares, 8.8 million warrants, and 18.85 million options. According to Market Watch, it trades in the 52-week range between CA$0.56 and CA$3.14.

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