has signed a Collaboration Agreement with the McLeod Lake Indian Band (MLIB) covering project design and planning for the Wicheeda rare earth element (REE) deposit, according to analysts Michael Gray and Jake Savage in a January 17 Agentis Capital report.
MLIB is also set to acquire a 1% equity stake in Defense Metals, indicating further support for advancing the asset. The analysts view indigenous alignment and impact investment as positive derisking steps.
Establishing Cooperation Framework
The co-design pact sees Defense Metals commit to integrating MLIB priorities into Wicheeda's feasibility study. Funding mechanisms are in place for community participation, including backing members' mining-related education.
By enabling local input and review involved in permitting, the collaborative development approach could streamline regulatory timelines down the road, according to the analysts. The agreement cements Defense Metals' relations with this key indigenous community.
Validating Support via Equity Investment
MLIB has agreed to a CA$665,000 investment to gain 2.6 million Defense Metals shares at CA$0.26, equating to a 1% ownership stake. The analysts believe this displays further conviction in progressing Wicheeda into a producing REE mine meeting sustainable goals.
The analysts highlight other major projects within MLIB traditional territory, demonstrating the band's openness to development and partnerships with industrial players in the region when impacts are properly addressed.
No Valuation Change But Further De-risking
The analysts' report makes no modifications to the undisclosed firm's discounted cash flow model price target for Defense Metals.
However, the analysts note that strengthened local indigenous community alignment and impact investment helped derisk Wicheeda's path to production.
|Want to be the first to know about interesting Base Metals and Critical Metals investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.
- [Defense Metals Corp.] is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of [Defense Metals Corp.].
For additional disclosures, please click here.
Disclosures for Agentis Capital, Defense Metals Corp., January 17, 2024
This report has been prepared by Agentis Capital Mining Partners for general information purposes only. This report should not be considered a solicitation to purchase or sell securities, a recommendation to buy or sell securities or investment advice, and any opinions expressed herein are the views of the author as at the date of the report. This document does not take into account the particular investment objectives, financial situations or needs of individual recipients, or other issues which may exist for certain individual recipients. Recipients should rely on their own investigations and take their own professional advice before investment. Information contained in this report is derived from sources believed to be reliable, but its accuracy cannot be guaranteed. In the United States this product is only intended for distribution to major institutional investors. Agentis Capital Mining Partners and its affiliates and associates, and their respective partners, directors, officers, employees, representatives and family members may hold positions in, and may buy or sell securities of, the companies referred to in this report. Additionally, Agentis Capital Mining Partners and its affiliates and associates (collectively, “Agentis Capital”), may have in the past provided, and may in the future provide, financial advisory and other services to the companies referred to in this report and receive financial and other incentives from the companies as consideration for the provision of such services. The Author/Analyst of the report will not purchase or sell any securities within 48 hours of publishing a report.
- A member of Agentis Capital has visited/viewed material operations of the issuer
- In the last 12 months, Agentis Capital has been retained under a service or advisory agreement by the issuer
- In the last 12 months, Agentis Capital has received compensation for investment banking services
- Agentis Capital or a member of the Agentis Capital team or household, has a long position in the shares and/or the options of the issuer
- The Author/Primary Analyst owns a position of less than 1% of any class of common equity of the issuer