Stillwater Critical Minerals Corp. (PGE:TSX.V; PGEZF:OTCQB; J0G:FSE) garnered research coverage by Red Cloud Securities with its initiation on the company with a Buy rating and a CA$1.20 per share target price, reported Taylor Combaluzier, vice president and mining analyst, in a July 31 research note.
"Given the company's presence in a prolific mining district and potential to significantly expand the current ~1,800,000,000 pounds of nickel equivalent (~1.8 Blb of Ni eq) resource base, we believe that the stock should be on the radar of investors," Combaluzier wrote. "Stillwater Critical offers investors a prime opportunity to gain exposure to critical minerals in the U.S. at a time when they have never been more in favor and supported by the current U.S. Administration."
445% Return Implied
At the time of Combaluzier's report, Stillwater Critical Minerals was trading at about CA$0.22 per share (CA$0.22/share), at a discount to its peers at an enterprise value per pound of Ni eq of US$0.02 versus the peer average at US$0.07, noted the analyst. Using US$0.07, the implied value of the company is CA$182.5 million (CA$182.5M), CA$0.69/share or about three times its current market cap of CA$58.2M.
Potential rerating of the company's share price could result from ongoing and future drill results at its flagship Stillwater West project, a resource expansion and the company moving from explorer to developer, wrote Combaluzier.
Red Cloud's CA$1.20/share target price on Stillwater Critical suggests potential uplift of 445%.
The company has 264.7 million basic shares outstanding. Its 52-week range is CA$0.09–0.31 per share.
The Canadian junior remains a Buy. Combaluzier presented the reasons why.
Set of Critical Minerals Assets
Stillwater Critical Minerals has a suite of exploration and development projects with various metals, many of them considered critical minerals by the U.S. Geological Survey (USGS), Combaluzier noted. Metals are nickel, copper, platinum, palladium, cobalt, rhodium, iridium, ruthenium, chromium and tellurium.
The company's current focus, Stillwater West, spans 61 square kilometers and boasts Platreef-style deposits of nickel (Ni), copper (Cu) and platinum group elements (PGEs). It is located in Montana an established mining jurisdiction with more than 100 years of production history, government support and infrastructure. More specifically, it is in the state's Stillwater Igneous Complex, the world's third largest system mineralized as such, and shares many similarities with the prolific Bushveld Complex of South Africa, the world's largest source of PGEs. Stillwater West encompasses the lower Stillwater Complex, one of the world's five largest layered mafic-ultramafic complexes, as well as other PGE-enriched deposits and targets.
What's more, Stillwater West is next to and shares a geological setting with Sibanye-Stillwater Ltd.'s (SBSW:NYSE) Stillwater project, mining high-grade PGE and operating for almost 40 years. Its mines are underground and produce ore from the J-M Reef. The analyst noted that Stillwater Critical potentially could leverage Stillwater West's proximity to Sibanye-Stillwater in the future, particularly since Sibanye has significant depletion at its site. It is possible that an adit from the J-M Reef could be extended to mine Stillwater West's Chrome Mountain and Iron Mountain deposits, according to Stillwater Critical's management.
Stillwater West already has a mineral resource estimate, 1.8 Blb Ni eq in the Inferred category, based on five deposits and 40,000 meters (40,000m) of drilling. The resource area is only 9.5 kilometers (9.5 km) of the prospective 25 km.
Potential exists to expand the resource in a couple of ways, noted Combaluzier. The 2,300,000 pounds of chromium and 115,000 ounces (115 Koz) of rhodium identified could be included. The resource could be expanded via drilling. The 12-km-long core of the system at Stillwater West is only partly drill tested and mineralization remains open in all directions. With further drilling, the deposits could be grown, possibly even into one another, thereby boosting the total resource.
As such, the company is in the process of drilling about 6,000m at Stillwater West to test eight big, bulk tonnage Platreef-style targets and six higher-grade reef-type targets and expand Chrome Mountain and Iron Mountain. Stillwater Critical's ultimate goal is to drill another 40,000m for a total of 80,000m to support a larger mineral resource estimate, with Indicated resources, in advance of a project preliminary economic assessment (PEA).
"We believe the existing resource at Stillwater West is poised to materially increase with the planned 2025 drill program and future drill programs," wrote Combaluzier.
Stillwater Critical has interests in several noncore assets, too, that provide monetization and upside potential. These are the Duke Island Cu-Ni-PGE project in Alaska, the Drayton-Black Lake gold (Au) project in Ontario (under an option agreement for up to 90% interest) and the PGE-Ni-Cu Kluane project in the Yukon. Further, Stillwater maintains royalty and back-in rights over the past-producing Yankee-Dundee mine in British Columbia that it sold in 2013.
PGE Prices Present Opportunity
Combaluzier pointed out that platinum and palladium prices broke out in Q2/25, and the metals' fundamentals should support these higher prices for some time.
Regarding platinum, considered a critical mineral by the USGS, this year is the third in a row of a structural supply deficit, expected to continue throughout the rest of this decade, according to the World Platinum Investment Council (WPIC). At the same time, investment demand for platinum has increased given the metal has become an investment alternative to gold. The WPIC forecasts investment demand this year to total 688 Koz of platinum, making 2025 the third consecutive year of net positive investment.
"Platinum and palladium mining in the USA is a significant opportunity in this context, especially given Stillwater West's neighbor, Sibanye-Stillwater, is seeing production declines in recent quarters," the analyst added.
Several Sources of Support
Stillwater Critical has various avenues of support that bode well for its success, noted Combaluzier. The company is part of the Metallic Group of Companies, a collaboration of precious and base metals exploration companies with a portfolio of large, brownfields assets, and has access to talented executives. The technical team and advisers have extensive experience in magmatic ore systems on numerous continents.
As for governmental support, at the federal level Stillwater Critical has received US$2.75M in governmental grants and with its many diverse critical minerals, is well positioned for more governmental support. This is particularly the case given the U.S. Administration's push and policies to advance domestic production and processing of critical minerals resources by expediting permitting, removing restrictions on use of federal land and providing funding.
"We believe the domestic policy environment in the U.S. is extremely conducive to advancing critical minerals projects and should directly benefit Stillwater Critical Minerals," Combaluzier wrote.
At the state level, Stillwater Critical maintains a relationship with the Montana government; members of the state's Congress have visited the site.
Also, Stillwater Critical has partnerships in place with industry and government. It is collaborating with Cornell University and the Lawrence Berkeley National Laboratory on research projects funded by grants from the U.S. Department of Energy. The company has a partnership with the University of British Columbia to research carbon sequestration at the Stillwater West property. To better understand the area's mineralized stratigraphy, the company is collaborating with the USGS.
Strong Financial Status
Stillwater Critical has sufficient funds to advance Stillwater West and for further exploration work in 2025 at its noncore assets, wrote Combaluzier, after raising CA$7M earlier this month. The company as about CA$8.9M in cash and no debt.
Major shareholder and global expert in nickel, Glencore International Plc (GLNCY:OTCMKTS; GLEN:LSE), participated in two rounds of Stillwater funding and may keep participating. Glencore owns 13.13% of the company. Stillwater Critical's management owns 7.28% and Dolefin SA holds 0.94%.
Catalysts on the Horizon
As Stillwater Critical continues advancing Stillwater West, several possible stock boosting events are to come. They include release of drill results, on an ongoing basis, and a mineral resource estimate update, anticipated in late Q4/25-early Q1/26. The PEA then would be completed in about H2/26.
Other potential catalysts include updates on the company's noncore projects.
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