Analysts’ Ideas Of The Week


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  1. Will the Bank of Canada hold its benchmark rate?
  2. A positive development for electric vehicle battery recycling companies.
  3. A junior gold producer under our coverage is acquiring a developer at a steeply discounted price.  
  4. A technology/marketing company under coverage beat our 2022 revenue forecast by 7%.
  5. Robinhood (NASDAQ: HOOD) has received an investigative subpoena, regarding its crypto operations, from the U.S. SEC.

FRC Top Picks

The following table shows last week’s top five performers among our Top Picks, including four junior resource companies, and one cannabis company. The top performer Chalice Brands Ltd. (OTCQB: CHALF), was up 46%. Chalice operates retail cannabis stores in Oregon. Our prior reports can be viewed here.

Top 5 Weekly PerformersWoW Returns
Chalice Brands Ltd. (CHALF)45.7%
Transition Metals Corp.(XTM.V)33.3%
Noram Lithium Corp. (NRM.V)12.1%
GR Silver Mining (GRSL.V)11.8%
White Rock Minerals Ltd. (WRMCF)10.0%
* Past performance is not indicative of future performance (as of March 06, 2023)

Companies on our Top Picks list were up 56% on average since we initiated coverage vs -28% for the benchmark (TSXV).

top picks chart
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)-3.6%-8.1%11.0%-14.5%-36.7%53.3%-18.4%
Private CompaniesN/AN/AN/AN/A4.7%25.3%16.4%
Portfolio (Total)1.3%-7.9%0.4%-11.2%-37.1%39.0%55.9%
Benchmark (Total)2.2%4.1%9.9%2.5%-24.0%24.3%-27.9%
Portfolio (Annualized)-----37.1%11.6%4.9%
Benchmark (Annualized) -----24.0%7.5%-3.5%

1. Since the earliest initiating date of companies in the list of Top Picks (as of March 6, 2023)
2. Green (blue) indicates FRC’s picks outperformed (underperformed) the benchmark.
3. Past performance is not indicative of future performance.

Our complete list of top picks (updated weekly) can be viewed here.

Weekly Mining Commentary

Last week, global equity markets rebounded, and were up 1.7% on average (down 0.7% in the prior week). The Eurozone reported higher than expected inflation, implying that the  European Central Bank (ECB) is likely to remain hawkish, and keep raising rates. As a result, the US$ retreated, and equity/metal prices rebounded last week. The Bank of Canada is meeting this week. We are expecting the central bank to hold its benchmark rate, implying potential weakness in the C$.   

current vs pre covid mining chart

Source: FRC/Various

Metal prices rebounded, amid a weaker US$.

week over week graph
year over year graph
lme inventory graph
shfe inventory graph

Valuations of gold producers were up 5% last week (down 8% in the prior week); base metal producers were up 7% (up 2% in the prior week).

gold producers chart
base metal producers chart
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
3Polyus 3.02n/a3.00n/a
4Agnico Eagle3.447.423.677.78
5AngloGold 1.674.181.904.40
6Kinross Gold 1.794.721.824.84
7Gold Fields2.074.332.174.47
13Eldorado Gold1.794.311.945.12
 Average (excl outliers)2.395.302.505.55
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.955.403.195.80
2Rio Tinto2.355.052.465.31
5Anglo American1.483.991.514.06
6Teck Resources2.224.752.465.02
7First Quantum2.857.003.187.78
 Average (excl outliers)1.974.972.125.30

We are maintaining our metal price forecasts.  

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,851$1,825$1,400
Silver (US$/oz)$21.13$22.00$18.00
Copper (US$/lb)$4.06$3.50$3.00
Zinc (US$/lb)$1.40$1.25$1.10
Nickel (US$/lb)$10.82$10.00$8.00
Source: FRC

Source: FRC

A key sector development is listed below (positive):

 – Electric vehicle battery recycling company Li-Cycle Holdings Corp. (NYSE: LICY/MCAP: US$1.04B) announced a US$375M loan from the U.S. Department of Energy, to build a lithium recycling facility in the U.S. We consider this a positive development for battery recycling companies. RecycLiCo Battery Materials Inc. (TSXV:AMY) is a company under our coverage, aiming to commercialize a technology to recycle cathode materials (nickel, cobalt, and manganese) in batteries.

Updates from Resource Companies Under Coverage

Steppe Gold Ltd./ TSX: STGO

PR Title

To acquire Anacortes Mining Corp. (TSXV: XYZ/MCAP: $15M) to create a leading diversified precious metals producer

FRC Opinion

Positive –  STGO is planning to acquire Anacortes Mining Corp. for $20M (paid in shares), reflecting a 36% premium to XYZ’s last closing price. STGO’s shares were up 3%, and XYZ’s shares were up 10%, on this news, implying that the market supports this transaction. XYZ has a high-grade, undeveloped gold deposit in Peru, with 2.5 Moz in indicated resources (including 0.6M in near-surface/low-CAPEX leachable resources). A Preliminary Economic Assessment (PEA) on the near-surface resource had returned an AT-NPV5% of US$166M. STGO’s acquisition price is just 9% of the project’s AT-NPV. We believe this deal should allow STGO to expand and diversify its portfolio for a very reasonable investment.

Tartisan Nickel Corp./CSE: TSN

Electric Royalties Ltd./TSXV: ELEC

PR Title

ELEC to acquire a 0.5% Gross Revenue Royalty (GRR) on the Kenbridge nickel project in Ontario

FRC Opinion

Positive – ELEC is acquiring a 0.5% GRR on Tartisan’s Kenbridge nickel project for $1.35M (cash + shares). A 2022 PEA on this project had returned attractive economics, with an AT-NPV5% of $109M, and a high AT-IRR of 20%, using US$10/lb nickel. We believe the project can be advanced to production in four years. Our fair value estimate of this deal is $1.44M (per our last report on TN in July 2022), implying that the proposed transaction terms are in line with our estimates. We believe this non-dilutive financing should highly benefit TN.

Power Nickel Inc./ TSXV: PNPN

PR Title

Extends nickel mineralization in multiple holes at its Nisk project in Quebec.

FRC Opinion

Positive – An ongoing drill program returned high nickel and copper grades over reasonably long intercepts, implying resource expansion potential. Key results included 10.25 m of 1.4% Ni/0.88% Cu, 6.85 m of 1.93% Ni/1.06% Cu, 5.2 m of 0.99% Ni/0.68% Cu, and 3.5 m of 1.23% Ni/0.73% Cu. Management is expecting to complete a maiden resource estimate by mid-year. PNPN is up 35% since we initiated coverage in December 2022.

Denarius Metals Corp./ TSXV: DSLV

PR Title

Announces a maiden resource estimate of 718,000 gold equivalent ounces at its Zancudo project in Colombia

FRC Opinion

Positive –  A promising/high-grade maiden resource estimate, with near-term production potential. We had not assigned any valuation on this property in our previous report. We will publish an update shortly.

Monument Mining Limited/ TSXV: MMY

PR Title

Progresses flotation commissioning at Selinsing

FRC Opinion

Positive – Completed construction of a flotation plant in late 2022, to start processing sulphide materials. Management is expecting to announce commercial production shortly. In FY2024 (12 months ended June 2024), we believe the company should be able to double its production, to 20+ Koz.

Enertopia Corporation/ CSE: ENRT

PR Title

Drilling update; rig mobilized

FRC Opinion

Positive – Commenced a drill program at its West Tonopah lithium project, upon receipt of a permit for 12 holes. We are expecting a maiden resource estimate this year.

Lomiko Metals Inc. /TSXV: LMR

PR Title

Announces a definitive agreement for acquisition of the Carmin graphite property in southern Quebec

FRC Opinion

Positive –  LMR can acquire a 100% interest for $100k. The Carmin property, which is located next to LMR’s La Loutre property, has a small, but high-grade historic resource. We believe this acquisition should expand La Loutre’s mine life.

Advance United Holdings Inc./ CSE: AUHI 

PR Title

Reports drillling results highlighting over 17.1 g/t gold at the Melba Mine property, Ontario

FRC Opinion

Positive – A 12-hole drill program returned promising values, including multiple high-grade intercepts. 11 holes returned 1+ gpt over lengths of up to 18 m. Management intends to resume drilling shortly.

Financials, Technology, Energy, and Special Situations

ESE Entertainment Inc./ TSXV: ESE

PR Title

Reports  record revenue and gross profit in 2022

FRC Opinion

Positive – In 2022, ESE reported $59M in revenue (up 417% YoY, driven by acquisitions), beating our estimate by 7%. However, net losses ($16M/EPS: -$0.26) were higher than our estimate ($13M/EPS: -$0.17) due to higher than expected expenses. We will publish an update shortly. ESE is a technology/marketing company focused on attracting gamers/users for its clients.

Lexaria Bioscience Corp./NASDAQ: LEXX

PR Title

DehydraTECH™ CBD diabetes study demonstrates weight loss and improved triglyceride and cholesterol levels

FRC Opinion

Positive – A study on animals indicated that LEXX’s DehydraTECH™ enabled CBD has potential weight loss benefits, with improvements in triglyceride and cholesterol levels.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were down 5% on average last week (down 8% in the previous week).

March 3, 2023
Binance Coin18%-4%-28%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.02T, down 5.5% MoM, and down 45.3% YoY

total crypto currency chart

Source: Coinmarketcap

Companies operating in the crypto space were trading at an average EV/R of 3.9x (previously 3.7x).

EV/R of Crypto Companies

ev r chart

Source: S&P Capital IQ/FRC

March 3, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.6
BIGG DigitalCSE: BIGG8.1
Canaan Inc. NASDAQ: CAN0.2
Coinbase GlobalNASDAQ: COIN4.4
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE1.9
Marathon Digital HoldingsNASDAQ: MARA9.8
Hut 8 Mining Corp. TSX: HUT2.7
Riot BlockchainNASDAQ: RIOT3.2

Source: S&P Capital IQ/FRC

Key sector developments are listed below (negative):

 – Robinhood has received an investigative subpoena, regarding its crypto operations, from the U.S. SEC. Surprisingly, the market ignored this news, as share prices have remained relatively flat since this announcement. We note that cryptos had accounted for 15% of Robinhood’s total revenue last year.

 – Sources indicate that Visa (NYSE: V) and Mastercard (NYSE: MA) have decided to push back the launch of new crypto-related products and services due to regulatory uncertainties.

 – Crypto banking firm Silvergate Captial (NYSE: SI) stated that it will not be filing its annual report on time, and that it is evaluating the viability of its business model.

Weekly Cannabis Commentary


Cannabis Industry Performance

March 3, 2023
U.S. CompaniesYTD1-Week1-Year
Cresco Labs Inc. 1%5%-70%
Curaleaf Holdings Inc. -9%6%-35%
Green Thumb Industries Inc.3%4%-46%
Trulieve Cannabis Corp.-14%5%-67%
Canadian CompaniesYTD1-Week1-Year
Aurora Cannabis Inc.-6%1%-74%
Canopy Growth Corp.-1%-2%-63%
Cronos Group Inc.-16%-1%-32%
HEXO Corp.60%-5%-79%
Organigram Holdings Inc.-5%3%-42%
Tilray Inc.3%-2%-45%
Canadian Average6%-1%-56%
U.S. Average-5%5%-54%

Source: FRC/Yahoo Finance

Last week, Canadian cannabis stocks underperformed their U.S. peers (-1% vs 5%). Canadian stocks had outperformed in the week prior to last.

 Key sector developments are listed below (positive):

– California has launched a $20M grant program to expand retail cannabis footprint in underserved areas.

– In February 2022, cannabis sales in Illinois were up 6% YoY, to US$121M (Source: MJBizDaily).

 – A government funded study in the U.S. has found that CBD can potentially reduce craving for tobacco.


Canadian cannabis stocks are trading at a 3% premium (previously 9% premium) relative to their U.S. peers.

February 27, 2023March 03, 2023
Canadian CompaniesTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.9NM1.8NM
Canopy Growth Corp.TSX: WEED4.8NM4.6NM
Cronos Group Inc.TSX: CRON0.0NM0.0NM
Organigram Holdings Inc.TSX: OGI1.487.81.487.8
Tilray Inc.NASDAQ: TLRY3.4NM3.1NM
U.S.   CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.712.32.812.9
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied Premium (Canada vs U.S.) (Average)9%3%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R

average ev r chart

Source: S&P Capital IQ, FRC

Canadian Retail Cannabis Stores

Currently, there are 3,488 retail cannabis stores in Canada, an increase of sixteen stores WoW, including thirteen new stores in ON, two in Alberta, and one in B.C.

                                                                                     Nationwide Store Count

cannabis stores chart

Source: Provincial Websites, FRC

Geographic RegionStore CountStore CountStore CountStore CountPopulationPopulation / Store
Alberta 752 753 755 757 4,428,247 5,850
B.C. 411 390 484 485 5,120,184 10,557
Manitoba 141 141 167 167 1,379,121 8,258
N.B. 20 20 25 25 780,890 31,236
N.S. 36 36 46 46 978,274 21,267
Newfoundland 37 37 39 39 520,437 13,345
Northwest Territories 7 7 6 6 44,982 7,497
Nunavut 39,486
Ontario 1,456 1,465 1,690 1,703 14,745,040 8,658
P.E.I. 4 4 4 4 158,717 39,679
Quebec 84 84 89 89 8,552,362    96,094
Saskatchewan 128 128 161 161 1,181,987 7,342
Yukon 7 7 6 6 41,293 6,882
CANADA 3,083 3,072 3,472 3,488 37,971,020 10,886

Source: Provincial Websites, FRC

Psychedelic Industry Performance

Psychedelic Industry Performance

Psychedelic stocks were down 1% on average last week (down 2% in the previous week).

March 3, 2023
Atai Life Sciences N.V.-41%-4%-70%
COMPASS Pathways plc6%4%-32%
Cybin Inc.11%-8%-49%
Delic Holdings Corp.-26%-15%-61%
GH Research8%10%-32%
Mind Medicine Inc.22%0%-77%
Numinus Wellness Inc.0%-4%-60%
Seelos Therapeutics Inc.4%6%-27%

Source: TMX Money, FRC

A key sector development is listed below (positive):

– Adastra Labs (CSE: XTRX) and Sunshine Labs have obtained permits from Health Canada to produce and sell cocaine, psilocybin, and psilocin for scientific and medical purposes.


Disclaimers and Disclosure

The opinions expressed in this report are the true opinions of the analyst(s) about any companies and industries mentioned. Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. Certain companies mentioned are covered by FRC under an issuer paid model. FRC or companies with related management, and Analysts, may hold shares/securities in some companies mentioned in this report. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time. To subscribe for real-time access to research, visit for subscription options. This report contains “forward looking” statements. Forward-looking statements regarding the Company, industry, and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company’s products/services in the marketplace; acceptance in the marketplace of the Company’s new product lines/services; competitive factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and other risks discussed in the Company’s periodic report filings, including interim reports, annual reports, and annual information forms filed with the various securities regulators. By making these forward-looking statements, Fundamental Research Corp. and the analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this report. Fundamental Research Corp DOES NOT MAKE ANY WARRANTIES, EXPRESSED OR IMPLIED, AS TO RESULTS TO BE OBTAINED FROM USING THIS INFORMATION AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OR FITNESS FOR A PARTICULAR USE. ANYONE USING THIS REPORT ASSUMES FULL RESPONSIBILITY FOR WHATEVER RESULTS THEY OBTAIN FROM WHATEVER USE THE INFORMATION WAS PUT TO. ALWAYS TALK TO YOUR FINANCIAL ADVISOR BEFORE YOU INVEST. WHETHER A STOCK SHOULD BE INCLUDED IN A PORTFOLIO DEPENDS ON ONE’S RISK TOLERANCE, OBJECTIVES, SITUATION, RETURN ON OTHER ASSETS, ETC. ONLY YOUR INVESTMENT ADVISOR WHO KNOWS YOUR UNIQUE CIRCUMSTANCES CAN MAKE A PROPER RECOMMENDATION AS TO THE MERIT OF ANY PARTICULAR SECURITY FOR INCLUSION IN YOUR PORTFOLIO. This REPORT is solely for informative purposes and is not a solicitation or an offer to buy or sell any security. It is not intended as being a complete description of the company, industry, securities or developments referred to in the material. Any forecasts contained in this report were independently prepared unless otherwise stated, and HAVE NOT BEEN endorsed by the Management of the company which is the subject of this report. Additional information is available upon request. THIS REPORT IS COPYRIGHT. YOU MAY NOT REDISTRIBUTE THIS REPORT WITHOUT OUR PERMISSION. Please give proper credit, including citing Fundamental Research Corp and/or the analyst, when quoting information from this report. The information contained in this report is intended to be viewed only in jurisdictions where it may be legally viewed and is not intended for use by any person or entity in any jurisdiction where such use would be contrary to local regulations or which would require any registration requirement within such jurisdiction.

Companies Mentioned:

Chalice Brands Ltd. (CHALF), Transition Metals Corp.(XTM.V), Noram Lithium Corp. (NRM.V), GR Silver Mining (GRSL.V), White Rock Minerals Ltd. (WRMCF), RecycLiCo Battery Materials Inc. (TSXV:AMY), Steppe Gold Ltd./ TSX: STGO, Tartisan Nickel Corp./CSE: TSN, Electric Royalties Ltd./TSXV: ELEC, Power Nickel Inc./ TSXV: PNPN, Denarius Metals Corp./ TSXV: DSLV, Monument Mining Limited/ TSXV: MMY, Enertopia Corporation/ CSE: ENRT, Lomiko Metals Inc. /TSXV: LMR, Advance United Holdings Inc./ CSE: AUHI , ESE Entertainment Inc./ TSXV: ESE, Lexaria Bioscience Corp.,.