Disclaimer: In an earlier version of the article, we mentioned Doc Jones and Johnny Lambo as influencers in a way that might have given the impression they are paid by Emerita. To clarify, Doc Jones, an activist shareholder, is a large supporter of the company investing his own capital. He has never been paid for his independent coverage. Johnny Lambo is also fully independent and is also not paid by the company for his coverage.
Emerita Resources Corp. (EMO:TSX.V - EMOTF:OTCMKTS - LLJA:FSE), which is engaged in the acquisition, exploration, and development of mineral properties with a primary focus on exploration in Spain, has a 100% interest in the Iberian Belt West (IBW) project located in the western part of the Iberian Pyrite Belt, adjacent to the border with Portugal, approximately 144 kilometers (km) west of Seville and 50 km from the port city of Huelva.
This project extends along a strike length of some 12 km and encompasses three polymetallic deposits. Another focus has also been on the company's Nuevo Tintillo project, located in the eastern part of the belt, in Seville Province, which is between the deposits of Aznalcollar, in the southeast and Rio Tinto in the northwest. Nuevo Tintillo encompasses approximately 14,500 hectares, with initial drilling expected to commence in Q4 2023.
The Catalyst: New NI 43-101 Technical Report
The technical report listed the following highlights:
Iberian Belt West Initial mineral resource estimate (MRE):
Indicated: 14.07 million tonnes (Mt) grading 3.29% zinc (Zn), 1.66% lead (Pb), 0.46% copper (Cu), 75.2 grams per tonne (g/t) silver (Ag), and 1.39 g/t gold (Au) (7.63% zinc equivalent [ZnEq]).
Inferred: 4.71 Mt grading 4.70% Zn, 2.14% Pb, 0.54% Cu, 72.4 g/t Ag, and 0.90 g/t Au (9.29% ZnEq).
Indicated 13 Mt grading 2.98% Zn, 1.45% Pb, 0.42% Cu, 74.1 g/t Ag, and 1.48 g/t Au (7.08% ZnEq).
Inferred 3.14 Mt grading 4.85% Zn, 1.96% Pb, 0.45% Cu, 71.3 g/t Ag, and 1.16 g/t Au (9.16% ZnEq)
The La Romanera mineral resource estimate was calculated using data from 144 holes comprising 52,750 meters of drilling.
Indicated: 1.07 Mt grading 7.10% Zn, 4.24% Pb, 1.03% Cu, 88.5 g/t Ag, and 0.32 g/t Au (14.32% ZnEq).
Inferred: 1.56 Mt grading 4.41% Zn, 2.49% Pb, 0.74% Cu, 74.7 g/t Ag, and 0.38 g/t Au (9.55% ZnEq).
The La Infanta mineral resource estimate was calculated using data from 86 holes comprising 19,565 meters of drilling.
Mineralization remains open at both deposits. The MRE confirms the resource starts at or near the surface and remains open for expansion at depth and along strike.
Why This Sector? Growing Need for Green Tech Metals
Copper, zinc, and lead are critical minerals that are vital to the future of renewable energy and green technology.
Reporting for visualcapitalist.com, Jeff Desjardins explains just how important copper is when it comes to building the new energy economy. "For every MW of wind power, about 3.6 tonnes of copper is needed – and for every MW of photovoltaic solar capacity, about 4-5 tonnes of copper is required.
"Further, roughly three times more copper is used for electric vehicles in comparison to conventional gas-powered vehicles. This alone could create a new major source of copper demand, and Schroders notes that if all 80 million new car sales were EVs today, it would require 6 million tonnes of additional copper.
"While this helps give a sense of perspective, let's instead look at a less hypothetical case. By 2035, Bloomberg projects a 43% penetration of EVs in the light-duty vehicle market, which will be roughly equal to 110 million cars. Using the above ratios, that's about 3.6 million tonnes of extra copper demand — equal to about 15% of the current market."
By 2035, Bloomberg projects a 43% penetration of EVs in the light-duty vehicle market, which will be roughly equal to 110 million cars.
The International Energy Agency (IEA) supports this analysis, writing in its report The Role of Critical Minerals in Clean Energy Transitions, "The shift to a clean energy system is set to drive a huge increase in the requirements for [base metal] minerals, meaning that the energy sector is emerging as a major force in mineral markets.
"Until the mid-2010s, for most minerals, the energy sector represented a small part of total demand," the report states. "However, as energy transitions gather pace, clean energy technologies are becoming the fastest-growing segment of demand. In a scenario that meets the Paris Agreement goals (as in the IEA Sustainable Development Scenario), their share of total demand rises significantly over the next two decades to over 40% for copper and rare earth elements, 60-70% for nickel and cobalt, and almost 90% for lithium.
"EVs and battery storage have already displaced consumer electronics to become the largest consumer of lithium," the report concludes, "and are set to take over from stainless steel as the largest end-user of nickel by 2040."
Why This Company? Polymetallic, Proximity to EU Markets
Emerita Resources is one of the biggest mining explorers in Europe, with two of the biggest copper-zinc-lead deposits in the world. The company's considerable holdings are made more valuable by how close they are located to European Union (EU) countries at the forefront of the clean energy transition.
In a March 12 roundup of small stocks worth watching, Technical Analyst Clive Maund wrote, "The charts for Emerita look increasingly positive."
As the European Parliament reports, "More than 20% of the energy consumed in the EU comes from renewable sources. This has more than doubled since 2004. The EU's current 32% target for 2030 is being revised up along with updated targets for buildings, heating and cooling, and industry. In September 2022, Parliament demanded an increase to 45% by 2030."
The reality is that these increasing regulatory requirements will drive up the prices of the materials needed to meet them, and those resources that are close by will be able to deliver for less, allowing producers to capture greater margins.
Emerita's projects' location near the port city of Huelva positions it to be able to take advantage of this close proximity.
The Iberian Pyrite Belt's mining history dates to the 8th century B.C. and is one of the world's greatest regions hosting metallic mineral deposits. Over 2 billion tonnes of ore have been extracted from the area already, and there are currently over 250 deposits known in the belt.
Despite considerable drilling already complete, La Romanera and La Infanta remain wide open for expansion, indicating the current assay results are only a snapshot in time with the potential for continued resource growth. The property's third deposit at IBW, El Cura, has also commenced initial drilling, with results expected shortly.
Current testing puts Romanera in the league of current advanced-stage projects — it's approximately twice the size of Adriatic's (AU$900 million market cap) Rupice deposit that is expected to start production in mid-2023 and Foran's (CA$660 million market cap) McIlvenna Main zone that is at the feasibility study stage and awaiting permits.
Emerita Resources is trading at a market cap of CA$77 million.
In a March 12 roundup of small stocks worth watching, Technical Analyst Clive Maund wrote, "The charts for Emerita look increasingly positive. After a severe bear market from its October-November 2021 peak, the decline has decelerated with the price beginning a basing pattern last July, although it actually hit bottom in November."
Streetwise Ownership Overview*
As Maund explains, "A trend of higher highs and lows has become evident this year with an initial upleg in January being followed by a second one towards the end of last month that challenged the still falling 200-day moving average. With the Accumulation line strengthening and moving averages converging, it doesn't look like it will tarry as long as it did after the first upleg before a third one gets started, and it is rated a Buy here in anticipation of this."
Ownership and Share Structure
Emerita Resources has a market cap of CA$77 million, with 234.82 million basic shares outstanding, alongside 23.95 million warrants and 19.19 million options.
Eric Sprott owns approximately 10% of the company with 20.5 million shares, and Merk Investments LLC owns another 1.3% (2.56 million shares.)
The company is followed by analyst Varun Arora at Clarus Securities.
In June 2023, the company raised CA$11 million in private placement offerings.
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- Owen Ferguson wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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