Emerita Resources Corp.'s (EMO:TSX.V; EMOTF:OTCQB; LLJA:FSE) expanded the global mineral resource of its IBW project in Spain by 37%, and mineralization remains open for expansion, reported Clarus Securities Analyst Varun Arora in a March 17 research note.
"We see potential for continued resource growth particularly at El Cura (at depth and along strike) and Romanera (at depth)," Arora wrote.
119% Return Potential
On the news, noted Arora, Clarus maintained its CA$3.15 per share target on the Canadian explorer. In comparison, its share price at the time of the report was about CA$1.44. From this price, the return to target is 119%.
Emerita Resources remains a Speculative Buy.
Main Growth Drivers
Clarus pointed out the various factors that contributed to the IBW resource expansion. The project's new global resource is 25,770,000 tons (25.77 Mt) of 8.51% zinc equivalent (Zn eq), adjusted for recoveries.
Stepout drilling at depth, below the prior resource by about 150–200 meters, resulted in the most resource growth. Better recovery assumptions, particularly for gold, contributed to increased tonnage and helped improve the grade.
Romanera added more than 5 Mt to the total IBW resource and boosted the grade to 7.85% Zn eq from 7.49% Zn eq previously. Total gold at Romanera also increased to 856,000 ounces (856 Koz) at 1.24 grams per ton (1.24 g/t), up from 734 Koz of 1.4 g/t before.
According to management, gold recoveries could contribute even more. Gold recoveries of 80%, for example, would take the Romanera grade to 8.34% Zn eq (from 7.85% Zn eq now), noted Arora. (Recovery assumptions are based on the actual metallurgical test results.)
Slightly higher price assumptions, particularly of gold, contributed to the increased resource, too.
Result Versus Model
Emerita's global IBW resource is 40% higher than Clarus' assumption in its mine model, noted Arora.
"We were only expecting about 2 Mt in resource growth and are pleasantly surprised by the significant resource growth," the analyst added.
However, the grade Clarus used is higher than the grade used to calculate the resource.
"On an in situ basis (100% metal recovery)," wrote Arora, "the grade is 9.8% Zn eq (versus 8.51% Zn eq adjusted for recoveries)."
3X Growth Possible
El Cura is a high-grade, copper-rich deposit (3.16% Cu eq) with a strong gold credit (1.44 g/t), wrote Arora. However, the reported resource of 1.3 Mt is shy of Clarus' forecast due to the drill density being insufficient "to pull the entire mineralized footprint that we based our 2 Mt estimate on," the analyst explained. With improved drill spacing, he added, future infill drilling should add more tonnage.
"We think continued drilling success can more than triple the resource at El Cura towards about 4 Mt," Arora wrote.
Catalyst-Rich Year Ahead
There are many events on the horizon for Emerita that could boost its stock price, as noted by Arora. Regarding IBW, receipt of the environmental certificate is expected this quarter or the next, a major derisking event in terms of permitting. Drilling with three to four active rigs at El Cura and Romanera is slated to start in Q2/25. Completion of a preliminary economic assessment of IBW is slated for late Q3/25-early Q4/25. Receipt of the exploitation license, allowing the start of mine construction, is anticipated in early 2026.
Another near-term catalyst is a determination in the Aznalcollar tender dispute-related trial that commenced on March 3, 2025.
Stock Information
Emerita Resources has 248 million shares outstanding. Its market cap is CA$357 million. Its 52-week range is CA$0.375–2.00 per share.
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- Emerita Resources Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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Disclosures for Clarus Securities, Emerita Resources Corp., March 17, 2025
Clarus Securities Equity Research Disclosures The analyst has visited the Company’s operations in Spain in November 2021. Partial payment or reimbursement was received from the issuer for the associated travel costs. Within the last 24 months, Clarus Securities Inc. has managed or co-managed a public offering of securities of this company. General Disclosure The information and opinions in this report were prepared by Clarus Securities Inc. (“Clarus Securities”). Clarus Securities is a wholly-owned subsidiary of Clarus Securities Holdings Ltd. and is an affiliate of such. The reader should assume that Clarus Securities or its affiliate may have a conflict of interest and should not rely solely on this report in evaluating whether or not to buy or sell securities of issuers discussed herein. The opinions, estimates and projections contained in this report are those of Clarus Securities as of the date of this report and are subject to change without notice. Clarus Securities endeavours to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information and opinions that are accurate and complete. However, Clarus Securities makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. Information may be available to Clarus Securities or its affiliate that is not reflected in this report. This report is not to be construed as an offer or solicitation to buy or sell any security. No part of this report may be reproduced or re-distributed without the written consent of Clarus Securities. Conflicts of Interest The research analyst and/or associates who prepared this report are compensated based upon (among other factors) the overall profitability of Clarus Securities and its affiliate, which includes the overall profitability of investment banking and related services. In the normal course of its business, Clarus Securities or its affiliate may provide financial advisory and/or investment banking services for the issuers mentioned in this report in return for remuneration and might seek to become engaged for such services from any of such issuers in this report within the next three months. Clarus Securities or its affiliate may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis. Clarus Securities, its affiliate, and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities discussed herein, or in related securities or in options, futures or other derivative instruments based thereon. Analyst’s Certification Each Clarus Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst’s personal views about the Company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report. Equity Research Ratings Buy: Attractively valued and expected to appreciate significantly from the current price over the next 12-18 months. Speculative Buy: Expected to appreciate significantly from the current price over the next 12-18 months. Financial and/or operational risk is high in the analyst’s view. Accumulate: Attractively valued, but given the current market price, is expected to appreciate moderately over the next 12 -18 months. Hold: Fairly valued and expected to trade in line with the current price over the next 12-18 months. Sell: Overvalued and expected to decline from the current price over the next 12-18 months. Under review: Pending additional review and/or information. No rating presently assigned. Tender: Company subject to an acquisition bid: accept offer. A summary of our research ratings distribution can be found on our website. Dissemination of Research Clarus Securities’ Equity Research is available via our website and is currently distributed in electronic form to our complete distribution list at the same time. Please contact your Clarus institutional sales or trading representative or investment advisor for more information. Institutional clients may also receive our research via THOMSON and REUTERS. For additional disclosures, please visit our website http://www.clarussecurities.com. © Clarus Securities Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.
