Analysts’ Ideas Of The Week


equity market


  1. Factors behind the equity market pullback last week
  2. Metal prices retreated amid a stronger US$
  3. Two material M&A transactions in the mining industry
  4. Paypal’s (NASDAQ: PYPL) recent move could be a potential threat to private cryptos
  5. New data supports a favourable outlook for Bitcoin prices

FRC Top Picks

The following table shows last week’s top five performers among our Top Picks, including four junior resource companies, and one biotech company. The top performer Hemostemix Inc. (TSXV: HEM), was up 30.4%. HEM is a clinical-stage biotech company with a patented process for treating critical limb ischemia (CLI) and ischemic heart disease. Our prior reports can be viewed here.

Top 5   Weekly PerformersWoW Returns
Hemostemix Inc. (HEM.V)30.4%
E3 Lithium Limited (ETL.V)14.7%
Lumina Gold Corp. (LUM.V)11.4%
Sabre Gold Mines Corp. (SGLD.TO)7.1%
Western Exploration Inc. (WEX.V)3.4%
* Past performance is not indicative of future performance (as of August 08, 2023)

Last week, companies on our Top Picks list were down 2.9% on average vs -3.1% for the benchmark.

AIW Top Picks
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)5.3%7.4%1.9%-23.2%-23.0%45.6%-22.4%
Private CompaniesN/AN/AN/AN/A6.7%20.5%30.5%
Portfolio (Total)-2.9%0.3%-8.0%-18.9%-17.7%-1.0%10.2%
Benchmark (Total)-3.1%-1.1%-2.0%-2.5%-9.0%-17.6%-31.4%
Portfolio (Annualized)-----17.7%-0.3%1.0%
Benchmark (Annualized) -----9.0%-6.2%-3.8%

1. Since the earliest initiating date of companies in the list of Top Picks (as of August 8, 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 down 2.2% on average (up 1.4% in the prior week). A primary factor contributing to this pullback was an announcement from China indicating that its imports and exports experienced double digit declines last month, suggesting weakness in global GDP growth. Another contributing factor stemmed from credit ratings agency Moody’s decision to downgrade the credit ratings of 10 small and mid-sized banks in the U.S., citing rising financial instability. The U.S. inflation data for July is expected later this week. We are sticking to our forecast, and believe that the Fed is likely to maintain its rate in the upcoming meeting in September.

AIW Top Picks

Source: FRC/Various

Metal prices retreated amid a stronger US$.


Valuations of gold producers were down 6% last week (down 4% in the prior week); base metal producers were down 4% last week (down 4% in the prior week).

gold producer
base metals
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
4Agnico Eagle4.098.443.887.93
6Kinross Gold 2.095.352.004.88
7Gold Fields3.116.022.825.44
9Hecla Mining4.4313.764.1412.84
13Eldorado Gold1.934.521.854.36
 Average (excl outliers)2.696.192.545.82
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 3.105.912.955.64
2Rio Tinto2.335.192.194.91
5Anglo American1.614.841.514.35
6Teck Resources2.636.032.565.91
7First Quantum3.759.553.609.14
 Average (excl outliers)2.195.902.095.67

We are maintaining our metal price forecasts.

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,924$1,875$1,400
Silver (US$/oz)$22.75$22.00$18.00
Copper (US$/lb)$3.85$3.50$3.00
Zinc (US$/lb)$1.14$1.25$1.10
Nickel (US$/lb)$9.31$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (positive):

– Silvercorp Metals Inc. (TSX: SVM/MCAP: $683M) is acquiring OreCorp Limited (ASX: ORR/MCAP: $176M) for $210M. The offer price represents a significant premium of 42% over ORR’s last closing price. ORR owns an advanced stage gold project in Tanzania. We note that SVM is paying $76/oz, which is approximately 50% higher than the sector average. We believe this transaction reaffirms our forecast for a surge in M&A transactions this year, given the prevailing depressed valuations of juniors, and the fact that equities have underperformed metal prices.  For example, gold prices are up 59% in the past five years, but the VanEck Junior Gold Miners ETF (GDXJ) has only increased by 30%. In the previous gold bull market (2009 – 2011), GDXJ had outperformed gold.

Albemarle Corporation (NYSE: ALB/MCAP: $31B) has acquired 4.9% of Patriot Battery Metals (TSXV: PMET/MCAP: $1.5B) for $109M, reflecting a premium of 7% over PMET’s last closing price. Last month, PMET had announced a large maiden resource estimate for its lithium project in Quebec. As mentioned in our previous reports, we anticipate majors to grow their EV-metal portfolios through M&A.

Updates from Resource Companies Under Coverage

Power Nickel Inc. / TSXV: PNPN

PR Title

Announces a $2.25M private placement

FRC Opinion

Positive – Proceeds will be used for exploration at its NISK high-grade nickel sulfide project in Quebec. Power is completing a NI 43-101 compliant resource estimate for the project, which contains class 1 nickel – the type used in lithium-ion batteries.

Monument Mining Limited / TSXV: MMY

PR Title

Partner Odyssey Gold (ASX: ODY) has completed a resource estimate for the Tuckanarra gold project (Australia)

FRC Opinion

Positive – ODY has delineated a maiden resource estimate, totaling 376 Koz gold. Per the terms of their partnership, MMY is entitled to a A$1M cash payment from ODY. MMY has a 20% interest in this project, in addition to the producing Selensing gold mine in Malaysia, and the Murchison gold project in Australia.

Churchill Resources Inc. / TSXV: CRI

PR Title

Completed a NI 43-101 report on Taylor Brook (Newfoundland)

FRC Opinion

Positive – Although the report did not include a resource estimate, it emphasized the potential for district-scale mineralization. Taylor Brook has high-grade nickel sulfide mineralization, with associated copper and platinum.

Skyharbour Resources Ltd. / TSXV: SYH

PR Title

Stakes uranium properties, increasing total portfolio to 518,000+ hectares in the Athabasca basin, Saskatchewan

FRC Opinion

Positive – SYH has added seven exploration claims to its portfolio. These projects are in pre-resource stage, and available for JV/option.

Sokoman Minerals Corp. / TSXV: SIC

PR Title

Reports high-grade gold assays at the Fleur de Lys gold project, Newfoundland

FRC Opinion

Positive – Promising results; grab samples from a new target returned bonanza gold grades, including the highest assay to date of 13.96 g/t. Management is planning follow-up exploration at the new target, as well as the main target.

Financials, Technology, Energy, and Special Situations

Elixinol Wellness Ltd./ASX: EXL

PR Title

Reports Q2-2023 revenue

FRC Opinion

Positive – Q2 revenue increased by 8% YoY, and was in line with our forecast.  The previously announced acquisition of hemp products manufacturer TSN is scheduled to be completed this month. We believe this transaction should allow EXL to increase its revenue by approximately 50%.

Golden Triangle Ventures/ OTC Pink: GTVH

PR Title

Commences sales of its Le Pragma CBD product line

FRC Opinion

Neutral – Pleased to see that GTVH has started generating revenue from a recently acquired developer/manufacturer of health and wellness products. Sales figures were not disclosed. GTVH has not provided any updates on its other business lines. We are continuing to refrain from assigning a  rating.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were flat on average last week (flat in the previous week as well).

August 8, 2023
Binance Coin1%2%-24%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.2T, down 1% MoM, but up 3% YoY.

total crypto

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 8.9x (previously 9.8x).

EV/R of Crypto Companies

ev r of crypto

Source: S&P Capital IQ/FRC

August 8, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.7
BIGG DigitalCSE: BIGG11.7
Canaan Inc. NASDAQ: CAN0.8
Coinbase GlobalNASDAQ: COIN7.3
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE4.1
Marathon Digital HoldingsNASDAQ: MARA27.1
Hut 8 Mining Corp. TSX: HUT8.2
Riot BlockchainNASDAQ: RIOT11.0

Source: S&P Capital IQ/FRC

Key sector developments are listed below (mixed):

Paypal has a launched a US$ stablecoin for payments and transfers. We view this as a potential threat to private cryptos, such as Bitcoin and Ethereum.

– New data from Blockchain analysis firm Glassnode suggest that 69% of the circulating supply of Bitcoin have remained inactive for at least a year. We believe the strong backing of long-term investors bodes well for the future outlook of Bitcoin.

– Zurich-based investment firm L1D has raised US$150M+ for a new venture capital fund focused on crypto startups. We believe this development suggests robust institutional support for the sector.

Weekly Cannabis Commentary


Cannabis Industry Performance

August 8, 2023

Source: FRC/Yahoo Finance

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


Canadian cannabis stocks are trading at a 1% discount on average (previously 3% premium) relative to their U.S. peers.

Jul 31, 2023Aug 08, 2023
Canadian CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.3NM1.3NM
Canopy Growth Corp.TSX: WEED2.7NM2.6NM
Organigram Holdings Inc.TSX: OGI0.6NM0.6NM
Tilray Inc.NASDAQ: TLRY2.8NM2.7NM
U.S. CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.617.12.717.3
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied Premium (Canada vs U.S.) (Average)3%-1%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R


Source: S&P Capital IQ, FRC

Psychedelic Industry Performance

Psychedelic stocks were down 5% on average last week (up 4% in the previous week).

August 8, 2023
Atai Life Sciences N.V.-35%-17%-61%
COMPASS Pathways plc1%-13%-59%
Cybin Inc.-20%-17%-53%
Delic Holdings Corp.-91%28%-92%
GH Research34%-1%8%
Mind Medicine Inc.46%-12%-51%
Numinus Wellness Inc.-7%-9%-32%
Seelos Therapeutics Inc.126%0%71%

Source: TMX Money, FRC

tesla survey

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, including HEM. 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:

Hemostemix Inc. (HEM.V), E3 Lithium Limited (ETL.V), Lumina Gold Corp. (LUM.V), Sabre Gold Mines Corp. (SGLD.TO), Western Exploration Inc. (WEX.V), Power Nickel Inc. / TSXV: PNPN, Monument Mining Limited / TSXV: MMY, Churchill Resources Inc. / TSXV: CRI, Skyharbour Resources Ltd. / TSXV: SYH, Sokoman Minerals Corp. / TSXV: SIC, Elixinol Wellness Ltd./ASX: EXL, Golden Triangle Ventures/ OTC Pink: GTVH.