Defense Metals Corp. (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) completed additional geotechnical and resource drilling at its Wicheeda rare earth element project in British Columbia, further expanding resources and derisking future mine development, reported Noble Capital Markets analyst Mark Reichman in a December 8 research note, rating the stock an Outperform.
Successful Geotech Campaign Supports Prefeasibility Study
According to Reichman, Phase II geotechnical drilling within the proposed Wicheeda pit limits showed significant widths of visible rare earth mineralization that could grow resources when pending assays are finalized. The program also provided pit slope stability data to inform Wicheeda's prefeasibility study slated for mid-April completion.
He noted that an airborne survey over the surrounding region identified additional targets for follow-up exploration.
Significant Upside As Project Derisked
Reichman's unchanged CA$0.90 price target implies over 400% upside potential for Defense Metals. His model values Wicheeda based on discounted cash flows from the project producing rare earth oxides.
With the prefeasibility study nearing and the potential for a 2024 feasibility study start, he sees Defense continuing to derisk the asset and add resource growth, supporting share price upside.
The analyst's rating and target accounted for execution risks around permitting, financing, and fluctuating rare earth prices. However, he believes the encouraging drill results reinforce Wicheeda's significant production potential.
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Disclosures for Noble Capital Markets, Defense Metals Corp., December 8, 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.
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