Emerita Resources Corp.'s (EMO:TSX.V; EMOTF:OTCQB; LLJA:FSE) stock got punished due to an unfavorable Spanish criminal court ruling on the Aznalcollar project tender, reported Clarus Securities Analyst Varun Arora in a Dec. 8 research note. On the news, Clarus updated its model on the Canadian explorer to exclude Aznalcollar, and this resulted in a 52% lower target price.
"In the absence of a guilty verdict, the stock has sold off, more than offsetting the value of Aznalcollar, in our opinion," Arora wrote.
According to Emerita, the criminal court's verdict is not the one determining who ends up owning Aznalcollar; the administrative court's ruling is.
266% Upside Implied
Clarus Securities' new target on Emerita is CA$1.50 per share (CA$1.50/share), noted Arora. In comparison, the company was trading at about CA$0.41/share at the time of the analyst's report.
From that share price, the return to the new target is 266%.
Emerita remains a Speculative Buy.
Current Valuation Unwarranted
After the Seville Provincial court acquitted all 16 defendants in the Aznalcollar criminal case, Emerita's stock fell about 65%, Arora reported. It is now trading at a 70–80% discount to peers on the basis of enterprise value:resource and price:net asset value: CA$0.02 per pound (CA$0.02/lb) and 0.16x versus CA$0.07/lb and 0.7x, respectively.
Clarus believes this is unwarranted.
"While we understand the strong negative reaction post the criminal trial verdict that has completely priced out Aznalcollar from the valuation, we think the stock is oversold based on what IBW is worth alone," Arora wrote.
Project NPV5% of CA$1 Billion
Iberian Belt West, Arora's flagship precious metals-rich project in Spain, offers a long mine life, compelling economics, and optionality to precious metals, the analyst highlighted.
IBW's global resource is 26,000,000 tons of 9.8% zinc equivalent (Zn eq) on an in situ basis with 1,600,000 ounces of 2 grams per ton (2 g/t) gold equivalent (gold and silver), likely larger at current precious metals projects. Prices used in the 2025 mineral resource estimate were US$2,200/oz gold and US$25/oz silver. Also, mineralization remains open for potential expansion.
Clarus' model on IBW shows annual average production of 220,000,000 pounds of Zn eq per year over a 22-year life of mine (LOM) at an all-in sustaining cost of US$0.70/lb of payable Zn eq. Initial capex is US$275 million (US$275M). Clarus estimates that gold and silver account for at least 55% of LOM revenue.
IBW's estimated net present value (NPV) discounted at 5% is US$767M (CA$1 billion). Its NPV:capex ratio is 3x, noted Arora.
Clarus' updated valuation model of Emerita is based solely on IBW.
Criminal vs. Admin Court
Generally, the market thought the end result of the Aznalcollar legal dispute depended on the criminal trial outcome, but according to Emerita, the market was wrong. The criminal court did not adjudicate on the legality of the Aznalcollar tender itself. That, the criminal court stated, is the role of the administrative court.
The administrative court is expected to rule in the near future. Its decision, Emerita believes, could be in its favor based on the evidence of irregularities in the tender process. Were the administrative court to rule in Emerita's favor, the Canadian explorer would become the owner of the Aznalcollar mine. In other words, according to Emerita, the Aznalcollar legal dispute is not yet over.
Upcoming Catalysts
Several events related to IBW are due to happen in the near term that could boost Emerita's share price. More drill results from El Cura and Romanera are anticipated on an ongoing basis. Completion of an updated mineral resource estimate on IBW is slated for Q1/26, followed by a prefeasibility study in June.
Also for IBW, receipt of an exploitation license and inclusion on Spain's list of Projects of Strategic Importance, a major derisking catalyst on the permitting front, are expected in late H1/26-early H2/26.
Ownership and Share Structure
Management and insiders own 5.2% of Emerita. The top shareholder is Eric Sprott's company, 2176423 Ontario Ltd., with 8.7%.
Emerita has 289 million shares outstanding. Its market cap is CA$428M. Its 52-week range is CA$0.55–2.00/share.
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Important Disclosures:
- Emerita Resources is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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Disclosures for Clarus Securities Inc., Emerita Resources Corp., December 8, 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.
