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New Finds at Historic Mine

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Earlier this month Emerita Resources Corp. announced it had made new finds at one of the oldest mining sites in history. Read more to see the release, what experts are saying, and where the company is headed for the rest of 2023.

Earlier this month, Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCMKTS; LLJ:FSE) released the assay results of their 12 additional drill holes on the Iberian Belt West.

The Emerita Resources Corp. is focused on mining mineral resources in Europe. The company is based in Sevilla, Spain, with branch offices in Toronto, Canada. Emerita owns over 18,000 combined hectares on the Iberian Pyrite Belt, with their flagship site, Iberian Belt West. Their property is located in Spain, close to the border with Portugal. The Iberian Belt West project “IBW” comprises three target areas on the western portion of the belt: La Romanera, La Infanta, and El Cura.

In a December research note, Arora Varun of Clarus Securities rated Emerita a Speculative Buy and said Emerita's "IBW project is set to deliver great news flow and likely surprise investors to the upside."

The Iberian Belt West has long been known as a prospective exploration site and was a source of valuable minerals for the ancient Romans. In modern times, the area is known to be friendly to mining. Long-term mining, especially acidic runoff, has significantly changed the environmental makeup of the area. Currently, however, miners in the area are operating at modern standards. 

The La Romanera section of the Iberian Belt West site has yielded encouraging results in the past, especially by the Rio Tinto.

Drill Results

The drill holes featured in the most recent release are focused in the La Romanera section. Several of the drill holes revealed significant findings of copper (Cu), lead (Pb), zinc (Zn), gold (Au), and silver (Ag).

Two highlights from the February 2, 2023 release included:

  • Drill hole LR064, which returned 0.2 % Cu; 2.0 % Pb; 5.1 % Zn; 1.16 g/t Au and 100.5 g/t Ag across 24.3m of mineralization.
  • Drill hole LR082, which returned 2.3 % Cu; 0.1 % Pb; 0.0 % Zn; 0.56 g/t Au and 45.3 g/t Ag over 4.5 from the upper lens and 0.1% Cu; 2.8% Pb; 4.1% Zn; 1.42g/t Au and 76.3 g/t Ag over 4.2 m from the lower lens.

Overall, the drill results typically found silver in the greatest abundance. The drill holes in this report are clustered in the central and western sections of the site, though Emerita suspects that the formation may continue westward.

Emerita Resources continues to drill and expects continues results over the next several weeks.

Why Silver, Copper, Zinc, and Lead?

According to Emerita, “copper, zinc, and Lead are critical minerals that are vital to the future of renewable energy and green energy. The company stated, "We are one of the biggest explorers in Europe with two large copper-zinc-lead deposits."

Analyst Clive Maund suggested in October that Emerita’s stocks, which had been in decline, may see a turnaround soon. According to Maund, “This looks like a recovery situation with the potential for large percentage gains . . . Factors suggesting that a sudden turnaround is in the offing are the steady diminution of downside momentum since May which is now at neutrality and the convergence of the downtrend which looks like a bullish Falling Wedge and also a Fan pattern, both of which are indicative of a downtrend that is decelerating ahead of a reversal to the upside.”

Maund indicated that positive news may raise the value of Emerita’s stocks. To that end, their recent drilling reports may bear consideration.

The finding of silver in particular may be of interest, given that it may see an increase in value.

According to analyst Richard Mills, “A month into 2023, and gold is up 15% versus silver’s 20% gain. Precious metals are rallying due to a combination of a lower U.S. dollar and an expected moderation of Fed rate hikes.” Mills also notes that silver is seeing increasing relevance in the production of solar panels, particularly in Chinese manufacturing, which may increase its value as an industrial metal. Emerita’s discovery of silver at this time, when markets are stressed by inflation, may be fortuitous given the metal’s reputation as a safe haven for investors.

Multiple Catalysts

On the future of Emerita’s operations, President Joaquin Merino has said “Our drill campaign remains on track, and we plan to lock the database in mid-February in order to proceed with the initial NI 43-101 mineral resource estimate for the IBW Project. We expect to have the mineral resource estimate completed in early Q2. We are presently reviewing proposals for metallurgical testing and this work will commence this quarter also. Our environmental baseline studies are also progressing and [are] expected to be completed in April. The baseline study is a key deliverable for the permitting process.”

According to analyst Richard Mills, “A month into 2023, and gold is up 15% versus silver’s 20% gain. Precious metals are rallying due to a combination of a lower U.S. dollar and an expected moderation of Fed rate hikes.” 

Emerita has hired a new Sr. VP, Ian Parkinson, with over a decade and a half of experience as a mining analyst. His experience in the industry stretches back ten years before his start as an analyst.

Currently, Emerita has 15 drill rigs and aims to define over 20Mt polymetallic deposits. The company has also identified a new alteration zone between El Cura, and La Infanta, with El Cura containing a potential high-grade copper deposit.

The company also anticipates a court settlement for the Aznalcollar public tender, which contains one of the largest known untapped zinc deposits. The site is reported to contain 73Mt of historic reserves, and the original site contained 91Mt with one zone that has not been drilled at all.

Ownership and Share Structure

Streetwise Ownership Overview*

Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCMKTS; LLJ:FSE)

*Share Structure as of 2/14/2023

According to Reuters, 15.15% of Emerita's stock is held by management and insiders. President Joaquin Merino, P.Geo. owns 0.99% or 2.03 million shares. CEO David Gower owns 1.21% or 2.46 million shares. Chairman Lawrence Guy owns 1.24% or 2.52 million shares. Director Marilia Bento owns 0.49% or 1 million shares, and Director Catherine Stretch owns 0.73% or 1.50 million shares. 

16.85% is held by institutions and strategic investors, the most significant of which is 2176423 Ontario Ltd., which owns 10.02% or 35.37 million shares, according to Reuters.

The rest is in retail

Emerita reports that the company has CA$20.1 million in the bank as of September 30, 2022. It reports no monthly burn rate or monthly drilling cost. 

The company has a market cap of CA$166 million and trades in the 52-week range between CA$0.56 and CA$3.14.

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1) Amanda Duvall wrote this article for Streetwise Reports LLC as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

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