Drilling Uncovers Copper-Gold Zone in Spain, Extending Resource Potential

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Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCQB; LLJA:FSE) has announced new assay results from its ongoing drilling program at the El Cura deposit, part of the company's Iberian Belt West (IBW) project in Spain. The results demonstrate consistent copper-gold mineralization with associated base metals, including zinc, lead, and silver at El Cura.

According to the company, drill hole EC037 intersected 9.3 meters grading 1.1% copper, 1.2 grams per tonne (g/t) gold, 0.7% lead, 2.1% zinc, and 34.8 g/t silver, with a higher-grade section of 2.5 meters containing 1.7% copper and 2.0 g/t gold. In addition, drill hole EC036 returned 5.2 meters of mineralization grading 2.1% copper, 1.6 g/t gold, 1.3% lead, 2.8% zinc, and 65.5 g/t silver.

The company also reported that hole EC034 intercepted 1.1 meters grading 2.2% copper, 3.5 g/t gold, 2.0% lead, 6.7% zinc, and 148.2 g/t silver. Drill hole EC024 intersected 2.0 meters with 0.9% copper and 0.9 g/t gold.

"The results of the drilling at El Cura deposit should make a significant contribution to the updated mineral resource estimate we are expecting to complete around the end of Q1 2025," said Joaquin Merino, P.Geo., President of Emerita, in a company news release.

The El Cura deposit, characterized as a copper-gold-silver-rich system, is situated within the IBW project's 10,135-hectare landholding in Andalucía, Spain. The IBW project includes three known volcanogenic massive sulfide (VMS) deposits: La Romanera, La Infanta, and El Cura. The deposit remains open to the west and at depth, with drilling continuing to extend mineralization and improve resource classification. 

Emerita has also sent samples from El Cura for metallurgical testing to support the upcoming resource update. The company reported that these new results extend the deposit's mineralized zone further west and confirm continuity with previously reported intersections.

Base and Precious Metals Sector Update

Gold and silver markets continued to see strong demand, driven by economic uncertainty and central bank purchasing. According to a January 27 report from Ahead of the Herd, gold prices reached multiple highs in 2024, with analysts attributing the rise to investor pessimism regarding geopolitics and government debt. Adrian Ash, director of research at BullionVault, stated via CNBC that "investors are optimistic about gold and silver for 2025 because they are so pessimistic on geopolitics and government debt."

Silver demand remained robust, particularly from industrial applications. The Silver Institute previously reported an 184.3-million-ounce deficit in 2023, and in 2024, demand was expected to grow by 2%, led by an anticipated 20% increase in solar PV market consumption. With silver's role in both investment and industrial applications, Kitco reported that some analysts anticipate continued price strength, with UBS strategist Julian Wee stating that silver could benefit from stronger industrial demand and possible Chinese rate cuts.

Arora emphasized the project's compelling economics and assigned Emerita a "Speculative Buy" rating with a target price of CA$3.15 per share.

Gold's strong price performance was further underscored by a February 1 report from Excelsior Prosperity, which detailed how gold reached an all-time high of US$2,862.90 on January 31. The report emphasized that the long-term gold bull market has been in place since 2015, with continued support from central bank purchases and macroeconomic factors. The article also highlighted that Discovery Silver's recent US$425 million acquisition of the Porcupine Gold Complex from Newmont Corporation underscored growing interest in the sector.

Copper also saw volatility amid shifting macroeconomic conditions. On February 4, Mining Weekly reported that copper and zinc prices climbed following a delay in tariffs on Canada and Mexico. The article noted that copper was trading 0.3% higher at $9,124 per tonne on the London Metal Exchange as trade sentiment improved and the U.S. dollar weakened. The report also highlighted ongoing concerns about Chinese demand, which could impact future price movements.

According to a February 8 article by Richard Mills in Ahead of the Herd, copper demand is expected to rise significantly due to its crucial role in emerging technologies and global decarbonization efforts. Mills cited BHP's chief commercial officer Rag Udd, who projected a 70% increase in global copper demand by 2050, reaching 50 million tonnes annually. This growth will be driven by increased usage in transportation, renewable energy infrastructure, and the expanding digital sector. Mills also noted that copper supply faces considerable challenges, including declining ore grades, aging mines, and a lack of new projects. The report highlighted that meeting the world's copper needs by 2050 will require approximately US$2.1 trillion in investments as the energy transition accelerates demand while supply struggles to keep pace.

Key Milestones For Emerita Resources's Growth

Emerita Resources has several upcoming milestones that could shape the future development of the IBW project. As detailed in the current investor presentation, the company expects to release an updated mineral resource estimate (MRE) by the end of the first quarter of 2025, which will, for the first time, include drill results from El Cura.

The company is advancing its metallurgical optimization program, particularly at El Cura, to assess processing characteristics for copper, gold, silver, zinc, and lead. Early results from the La Romanera deposit demonstrated a two-stage process with recoveries of 91.3% zinc, 85.8% copper, 80.5% silver, and 64.3% gold. The metallurgical testing incorporates the CLEVR technology, a cyanide-free method designed to minimize environmental impact.

Emerita has also filed an exploitation license application for the IBW project, which, if approved, will transition the site from exploration to mine development. The application, filed in late 2023, grants the project a 30-year operating term, renewable for up to 90 years. The project has received a "Designation of Strategic Importance" from the regional government, which provides accelerated permitting support.

In addition, Emerita has secured a US$15 million loan facility from Nebari Resources, with the initial US$6 million tranche already drawn. The funds are earmarked for drilling, metallurgical work, and environmental permitting.

The IBW project is positioned in a region known for its mining history, alongside operations like Lundin Mining's Neves-Corvo and Sandfire's Aguas Teñidas mine. The company's continued drilling success at El Cura, combined with its forthcoming resource update and permitting progress, represents ongoing development within this historical mining district.

Expert Analysis Highlights Positive Outlook for Emerita Resources

In a December 24 report by Clarus Securities, analyst Varun Arora maintained a positive outlook on Emerita Resources Corp. following the company's release of new metallurgical testing results for its IBW polymetallic project in Spain. Arora highlighted the significant improvements in metal recovery rates, particularly for gold, where recoveries increased from 20% to 64.3%. He noted that this development could potentially add an additional US$800 million in revenue over the life of the mine.

Arora emphasized the project's compelling economics and assigned Emerita a "Speculative Buy" rating with a target price of CA$3.15 per share, representing an implied return of 174% from the report's publication price. He concluded that the improved metallurgical performance, coupled with upcoming catalysts like a mineral resource update, supports the potential for continued share price re-rating.

Ownership and Share Structure

According to Refinitiv, management and insiders own 5.82% of Emerita. Of those, Michael Lawrence Guy owns 1.51% of the company, David Patrick Gower owns 1.35%, and Joaquin Merino-Marquez owns 1.08%.

Institutions own 1.17% of the company, including Merk Investments LLC, with 1.09%.

According to Refinitiv, there are 253.1 million shares outstanding with 238.36 million free float traded shares, while the company has a market cap of CA$478.36 million and trades in a 52-week range of CA$0.38 and CA$2.00.