Analysts’ Ideas Of The Week


mining m&a


  1. Why did equity markets trend higher last week?
  2. Two more M&A deals in the mining sector
  3. A gold junior under coverage announced a robust Preliminary Economic Assessment (PEA); shares are trading at just 10% of AT-NPV5%.
  4. Last week, Bitcoin prices surpassed $30k for the first time since June 2022.

FRC Top Picks

The following table shows last week’s top five performers among our Top Picks, including five junior resource companies. The top performer, South Star Battery Metals (TSXV: STS), was up 38.5%. STS is advancing graphite projects in Brazil and the U.S. Our prior reports can be viewed here.

Top 5 Weekly PerformersWoW Returns
South Star Battery Metals Corp. (STS.V)38.5%
Rio2 Limited (RIO.V)25.0%
Panoro Minerals (PML.V)16.7%
Golden Minerals Company (AUMN.TO)16.1%
E3 Lithium Limited (ETL.V)8.9%
* Past performance is not indicative of future performance (as of April 17, 2023)

Last week, companies on our Top Picks list were up 3.3% on average vs 0.8% for the benchmark (TSXV).

AIW Top Picks
Total Return1 Week1 mo3 mo6 mo3 yrSince launch
Special Situations (MIC)1.4%3.5%-20.2%-17.5%63.2%-20.9%
Private CompaniesN/AN/AN/AN/A157.4%7.1%
Portfolio (Total)3.3%6.6%-11.5%-3.7%55.1%14.0%
Benchmark (Total)0.8%4.4%2.3%7.7%39.2%-28.7%
Portfolio (Annualized)----15.8%1.4%
Benchmark (Annualized) ----11.7%-3.6%

1. Since the earliest initiating date of companies in the list of Top Picks (as of April 17, 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 were up 1.6% on average (up 0.1% in the prior week). The S&P 500 was up 0.9% on signs of cooling inflation. In March 2023, inflation declined to 5% YoY (the lowest since May 2021), down from 6% YoY in February 2023. The TSX was up 1.8% as the Bank of Canada decided to maintain its benchmark rate. We remain positive on gold and silver, and believe that lower yields should drive equity valuations higher in H2-2023.

current vs pre covid mining chart

Source: FRC/Various

Base metals prices rallied due to a weaker US$, and lower inventory levels on the LME.

week over week graph of market
year over year of market
lme chart
shfe chart

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

gold producers chart
base metals producers chart
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
3Polyus n/an/an/an/a
4Agnico Eagle4.259.154.639.82
5AngloGold 2.526.122.596.29
6Kinross Gold 2.205.822.275.85
7Gold Fields3.
13Eldorado Gold2.085.422.165.48
 Average (excl outliers)2.816.572.876.67
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.925.343.045.57
2Rio Tinto2.234.762.334.98
5Anglo American1.443.831.493.95
6Teck Resources2.325.062.365.00
7First Quantum3.127.603.348.09
 Average (excl outliers)1.985.002.085.21

We are maintaining our metal price forecasts.  

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,988$1,825$1,400
Silver (US$/oz)$24.93$22.00$18.00
Copper (US$/lb)$4.06$3.50$3.00
Zinc (US$/lb)$1.32$1.25$1.10
Nickel (US$/lb)$10.90$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (positive):

– Teck Resources (TSX: TECK) has stated that Vale (NYSE: VALE), Anglo American (LSE: AAL), and Freeport-McMoRan (NYSE: FCX) have approached them for M&A. Earlier this month, Teck had rejected a US$23B bid from Glencore (LSE: GLEN). At that time, we had stated that Teck might have entertained the offer if Glencore’s bid was at least 10%-20% higher.

 – Hudbay Minerals (TSX: HBM/MCAP: $1.8B) has entered into a definitive agreement to acquire Copper Mountain Mining Corporation (TSX:CMMC /MCAP: $557M)  for $588M. The offer price reflects a 23% premium to CMMC’s last closing price. CMMC produces 100 Mlbs CuEq per year from its copper mine in B.C.

 – West Red Lake Gold Mines Ltd. (TSXV: WRLG/MCAP: $24M) has entered into a definitive agreement to acquire Pure Gold Mining Inc. (NEX:PGM.H) for $19M in cash and shares. PGM is under creditor protection, as it ran into liquidity issues, when it suspended operations at its gold mine in Ontario last year.

 Check out our top picks page to view juniors that we believe are good M&A candidates.

Updates from Resource Companies Under Coverage

Cartier Resources Inc./ TSXV: ECR

PR Title

Delivers a positive PEA on the Chimo mine project

FRC Opinion

Positive – A PEA on the company’s flagship project returned an AT-NPV5% of $388M, and an AT-IRR of 21%, using US$1,750/oz gold. ECR is trading at just 10% of AT-NPV5%. This project is projected to produce 117 Koz per year, making it a relatively large gold producer held by a junior. We will publish an update shortly.

Lomiko Metals Inc./ TSXV: LMR

PR Title

Announces an updated resource estimate for the La Loutre graphite property in Quebec

FRC Opinion

Positive – Indicated resources increased by 195%, accounting for 80% of total resources, implying increased confidence. Resources are spread across two deposits, both of which remain open at depth. We will publish an update report, with a revised fair value estimate, shortly.

SPC Nickel Corp./ TSXV: SPC

PR Title

Intersects 2.48% nickel and 0.64% copper over 7.8 m at the West Graham project, Sudbury, Ontario

FRC Opinion

Positive – Drilling at the recently optioned CH3 project returned high nickel grades, consistent with, or better than, the project’s historic resources.

Advance United Holdings Inc./CSE: AUHI

PR Title

Announces Buck Lake property assay results, including high-grade copper and critical minerals

FRC Opinion

Positive – 13 out of 15 holes intersected copper/zinc mineralization, delineating a 500 m mineralized zone. Management plans to conduct follow-up geophysics and drilling.

Sokoman Minerals Corp./ TSXV: SIC

PR Title

Reports additional assay results from the Moosehead gold project in central Newfoundland

FRC Opinion

Positive – Drilling has expanded the project’s mineralized footprint.

Chatham Rock Phosphate/ TSXV: NZP

PR Title

Announced a $3.9M private placement

FRC Opinion

Positive – Chatham is aiming to advance its first phosphate project to production by Q4-2023

Financial / Technoloy / Energy / Special Situations 

CIBT Education Group Inc./ TSX: MBA

 PR Title

Announced Q2-FY2023 (ended February 2023) results

FRC Opinion

Negative – Q2 revenue was up 2%, and in line with our estimate. However, EBITDA was down 33% YoY (16% below our forecast), due to lower gross margins and higher G&A expenses. We will publish an update report shortly.

Additional Updates on Coverage:

We are suspending coverage on Wealth Minerals and EUDA Health as management of these companies have not responded to our questions for an update report.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were up 7% on average last week (up 2% in the previous week).

April 17, 2023
Binance Coin38%7%-16%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.3T, up 19% MoM, but down 32% YoY.

total crypto currency chart

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 6.5x (previously 5.1x).

EV/R of Crypto Companies

ev r crypto companies

Source: S&P Capital IQ/FRC

April 17, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.7
BIGG DigitalCSE: BIGG8.4
Canaan Inc. NASDAQ: CAN0.7
Coinbase GlobalNASDAQ: COIN4.9
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE2.6
Marathon Digital HoldingsNASDAQ: MARA22.8
Hut 8 Mining Corp. TSX: HUT4.3
Riot BlockchainNASDAQ: RIOT7.9

Source: S&P Capital IQ/FRC

A key sector development is listed below (negative):

– The U.S. SEC has filed a lawsuit against crypto exchange Bittrex for potentially violating federal laws.

Weekly Cannabis Commentary


Cannabis Industry Performance

April 17, 2023
U.S. CompaniesYTD1-Week1-Year
Cresco Labs Inc. -18%-1%-73%
Curaleaf Holdings Inc. -41%7%-59%
Green Thumb Industries Inc.-16%1%-55%
Trulieve Cannabis Corp.-27%8%-68%
Canadian CompaniesYTD1-Week1-Year
Aurora Cannabis Inc.-30%-3%-79%
Canopy Growth Corp.-37%-9%-74%
Cronos Group Inc.-23%0%-36%
HEXO Corp.14%-29%-82%
Organigram Holdings Inc.-33%-21%-64%
Tilray Inc.-9%-11%-54%
Canadian Average-20%-12%-65%
U.S. Average-26%4%-64%

Source: FRC/Yahoo Finance

Last week, Canadian cannabis stocks underperformed their U.S. peers (-12% vs 4%).  Canadian stocks had outperformed in the week prior to last.

Key sector developments are listed below (mixed):

– According to the marijuana industry recruitment firm Vangst, cannabis firms in Colorado slashed 10,500 jobs (28% of the workforce) in the 12 months ended February 2023, amid declining cannabis prices.

– Missouri commenced recreational cannabis sales in early February 2023. Sales were up 23% MoM in March 2023. At the current rate, sales could surpass US$1B this year.


Canadian cannabis stocks are trading in line with their U.S. peers (previously trading at a 6% premium).

April 10, 2023April 17, 2023
Canadian   CompaniesTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.4NM1.4NM
Canopy Growth Corp.TSX: WEED3.7NM3.4NM
Cronos Group Inc.TSX: CRON0.0NM0.0NM
Organigram Holdings Inc.TSX: OGI1.064.21.0NM
Tilray Inc.NASDAQ: TLRY3.0NM2.8NM
U.S. CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied   Premium (Canada vs U.S.) (Average)6%0%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R

average ev r

Source: S&P Capital IQ, FRC

Canadian Retail Cannabis Stores

Currently, there are 3,512 retail cannabis stores in Canada, an increase of five stores WoW, including six new stores in B.C and one in Alberta, and two closures in ON.

                                                                                     Nationwide Store Count

nation wide store count

Source: Provincial Websites, FRC

Geographic RegionStore CountStore CountStore CountStore CountPopulationPopulation / Store
Alberta 756 756 755 756 4,428,247 5,857
B.C. 431 431 482 488 5,120,184    10,492
Manitoba 151 151 167 167 1,379,121 8,258
N.B. 20 20 25 25 780,890 31,236
N.S. 37 37 46 46 978,274   21,267
Newfoundland 40 40 39 39 520,437   13,345
Northwest Territories 6 6 6 6 44,982 7,497
Nunavut 39,486
Ontario 1,513 1,517 1,727 1,725 14,745,040 8,548
P.E.I. 4 4 4 4 158,717    39,679
Quebec 87 87 89 89 8,552,362    96,094
Saskatchewan 130 130 161 161 1,181,987 7,342
Yukon 7 7 6 6 41,293 6,882
CANADA 3,182 3,186 3,507 3,512 37,971,020    10,812

Source: Provincial Websites, FRC

Psychedelic Industry Performance

Psychedelic Industry Performance

Psychedelic stocks were up 4% on average last week (up 4% in the previous week as well).

April 17, 2023
Atai Life Sciences N.V.-27%16%-62%
COMPASS Pathways plc27%-3%-17%
Cybin Inc.-9%1%-51%
Delic Holdings Corp.-82%17%-84%
GH Research-16%-2%-57%
Mind Medicine Inc.17%17%-74%
Numinus Wellness Inc.-32%-10%-64%
Seelos Therapeutics Inc.16%-4%6%

Source: TMX Money, FRC

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:

South Star Battery Metals Corp. (STS.V), Rio2 Limited (RIO.V), Panoro Minerals (PML.V), Golden Minerals Company (AUMN.TO), E3 Lithium Limited (ETL.V), Cartier Resources Inc./ TSXV: ECR, Lomiko Metals Inc./ TSXV: LMR, SPC Nickel Corp./ TSXV: SPC, Advance United Holdings Inc./CSE: AUHI, Sokoman Minerals Corp./ TSXV: SIC, Chatham Rock Phosphate/, CIBT Education Group Inc./ TSX: MBA.