Defense Metals Corp.'s (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) latest drill results from its Wicheeda project are noteworthy for two reasons: high grades and the second longest rare earth elements-mineralized intercept of the 2021 and 2022 drill programs, reported Noble Capital Markets analyst Mark Reichman in a Jan. 18 research note.
Noble has an Outperform rating and a US$0.70 per share price target on this Canadian critical metals company, currently trading at about US$0.24 per share.
"We think Defense Metals is well positioned to benefit from growing demand for rare earths used in electric vehicle batteries, metal alloys, and advanced technology applications," Reichman wrote.
Results at a Glance
These new data are from eight drill holes, representing 2,104 meters (2,104m) of drilling, part of the 2022 drill program. Of these eight holes, two were exploration, three were resource delineation, and three were pit slope geotechnical cores.
In his report, Reichman presented some of the standout results, which reflect the high grades.
"In addition to [the] significant potential to expand the resource and extend the mine life beyond 19 years, we expect grade enhancement and the meaningful conversion of Inferred to Indicated and potentially Measured resources," he wrote.
Hole WI22-74, for instance, returned 3.77% total rare earth oxides (TREOs) over 30m from surface and 2.52% TREOs over 59m, both midhole. These intercepts were contained within a broader zone of 2.03% TREOs over 192m.
Additionally, hole WI22-71 yielded 2.83% TREOs over 66m and was within a broader mineralized zone showing 1.47% TREOs over 207m.
Hole WT22-73 returned 2.35% TREOs over 81m, also enveloped in a larger mineralized zone. The broader zone yielded 1.42% TREOs in the second-longest intercept encountered in all of 2021 and 2022 drilling: 222m.
Both WI22-71 and WT22-73 intersected dolomite-carbonatite mineralization from surface.
On the Horizon
Once the remaining 2022 drill campaign results are in, Defense Metals intends to update the Wicheeda resource estimate, noted Reichman. Results from 10,859m of drilling in 47 core holes, not included in the preliminary economic assessment (PEA), will be incorporated into the new resource.
Subsequently, the Vancouver, British Columbia-based company plans to do a prefeasibility study (PFS) of Wicheeda, to include all results from the past two years' drill campaigns. Completion of this report is expected by Q4/23.
Reichman pointed out Noble expects the PFS will show meaningful differences from the PEA.
"In addition to [the] significant potential to expand the resource and extend the mine life beyond 19 years, we expect grade enhancement and the meaningful conversion of Inferred to Indicated and potentially Measured resources," he wrote.
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Disclosures For Noble Capital Partners, Defense Metals Corp., January 18, 2023
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ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE
Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis. Named WSJ 'Best on the Street' Analyst and Forbes/StarMine's "Best Brokerage Analyst." FINRA licenses 7, 24, 63, 87.
RESEARCH ANALYST CERTIFICATION
Independence Of View All views expressed in this report accurately reflect my personal views about the subject securities or issuers. Receipt of Compensation No part of my compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in the public appearance and/or research report.
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NOTE: On August 20, 2018, Noble Capital Markets, Inc. changed the terminology of its ratings (as shown above) from "Buy" to "Outperform", from "Hold" to "Market Perform" and from "Sell" to "Underperform." The percentage relationships, as compared to current price (definitions), have remained the same.
