Opawica Explorations Inc. (OPW:TSX.V) garnered the attention of Couloir Capital in that Analyst Tim Wright initiated coverage on it with a Buy rating and a CA$0.33 per share target price, he reported in a May 7 research note. The target suggest a potential return of 102% given Opawica's current share price is CA$0.16.
"Opawica continues to drill its flagship [gold] projects and work towards a maiden resource," Wright wrote, referring to Bazooka and Arrowhead, acquired together in 2016 and located in Quebec's prolific Abitibi Greenstone Belt.
"The region hosts numerous multimillion-ounce gold deposits and operating mine sites and represents one of the most fertile geological domains for gold worldwide," wrote Wright.
The Canadian explorer's third gold project is McWatters, located along the Cadillac-Larder Lake Break, one of the world's most prolific gold-bearing structures.
Successful Target Generation
The analyst pointed out that Opawica employs a combination of geology experts and artificial intelligence and machine learning to identify drill targets and that this approach is working. Further, it has enabled the company to secure funding and needed drill permits to advance its exploration efforts.
"Already tested targets have yielded fantastic drill results, validating the firm's approach to exploration," wrote Wright.
With this strategy, Opawica has generated about 10 kilometers' (10 km) worth of drill targets at Bazooka and Arrowhead collectively. Of these, it drilled 4 km's worth at Bazooka, returning these notable intercepts: 77.18 grams per ton (77.18 g/t) gold over 5.79 meters (5.79m) and 7.7 g/t gold over 20m.
Last April, drilling at Bazooka intersected two different mineralized zones, one 42m long, the other 60m long, in which gold was visible in parts of the drill hole. Results for these are pending "and could well lend a boost to the OPW share price upon release," noted the analyst.
At all three properties, Opawica has done various geological and geophysical surveys, to the tune of $US$3 million (US$3M) and more than 11,000m of drilling, at a cost of another US$3M.
Drilling is Primary Focus
Going forward, Opawica intends to keep drilling at both Bazooka and Arrowhead, where 16,000m of high-priority targets are ready for drilling. Given that only 1 km of a 7 km fault zone has been explored so far at Bazooka, plenty of upside potential remains. Additionally, Opawica plans to raise additional capital to fund ongoing drilling.
"Shareholders can look forward to continued drilling on the projects and steady news flow with drill results," Wright wrote.
Another factor supporting Opawica's share price is the gold price, noted Wright, trading at all-time highs, attracting investor interest and expected to remain buoyed for some time.
Leadership Snapshot
In his report, Wright included the biographies of key management and board members. Leading Opawica is Chief Executive Officer (CEO) Blake Morgan, who has been with the company since May 2020. He is CEO of Orogenic Regional Exploration (since 2019) and Western Star Resources (since 2022) as well. With extensive capital markets experience, Morgan is known for assembling land packages and leading financings, in the natural resources and precious metals sectors.
Opawica's chief financial officer is Marcy Kiesman. Along with Morgan, directors include Owen King and Philippe Harvard.
Ownership and Share Structure
Insiders own about 19% of Opawica, of which Morgan holds about 14%, Wright reported. Institutional investors, including Eric Sprott, Red Cloud Securities, Canaccord Genuity and Ventum Capital, own about 56%. The public and other hold the remaining 25%.
"The current share structure is tight for a junior exploration company, with only 39.3 million shares outstanding, giving Opawica a high level of insider ownership, indicating alignment with shareholder interest," the analyst wrote.
The company's market cap is CA$6M.
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