Analysts’ Ideas Of The Week


equity market


  1. Why the US$ and equity markets move in tandem last week, despite their historical divergence?
  2. A historically anti-nuclear country is lifting its ban on uranium mining.
  3. A glimmer of optimism for base metals
  4. Mastercard (NYSE: MA) is disassociating with Binance. This fallout is bad news not only for Binance, but also for all crypto platforms
  5. New crypto policies by the U.S and Korea should boost investor sentiment

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, Rio2 Limited (TSXV: RIO), was up 25.0%. RIO is advancing a large gold project in Chile. Our prior reports can be viewed here.

Top 5   Weekly PerformersWoW Returns
Rio2 Limited (RIO.V)25.0%
Golden Minerals Company (AUMN.TO)10.3%
Millennial Potash Corp. (MLP.V)10.0%
New Age Metals Inc. (NAM.V)10.0%
Giga Metals Corporation (GIGA.V)9.5%
* Past performance is not indicative of future performance (as of August 28, 2023)

Last week, companies on our Top Picks list were up 0.2% on average vs -0.2% for the benchmark (TSXV).

AIW Top Picks
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)-2.9%0.7%-0.4%-22.7%-27.9%37.9%-23.2%
Private CompaniesN/AN/AN/AN/A6.7%20.5%30.5%
Portfolio (Total)0.2%-6.3%-8.1%-17.2%-16.3%-0.4%9.8%
Benchmark (Total)-0.2%-6.6%-3.8%-7.4%-9.2%-21.0%-34.1%
Portfolio (Annualized)-----16.3%-0.1%1.0%
Benchmark (Annualized) -----9.2%-7.6%-4.2%

1. Since the earliest initiating date of companies in the list of Top Picks (as of August 28, 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 0.9% on average (down 2.2% in the prior week), and the US$ was up 0.6%. We note that equity markets and the US$ seldom move in tandem. We believe the divergence in historic correlation can be attributed to disappointing U.S. manufacturing and services PMI figures, coupled with even weaker data from Europe. These factors indicate the potential for central banks adopting a more dovish stance. We anticipate that the Fed will keep its rate steady in the upcoming meeting next month.

AIW Top Picks

Source: FRC/Various

Metal prices were up 3.8% on average (down 0.9% in the previous week).


Valuations of gold producers were up 5% last week (down 6% in the prior week); base metal producers were up 2% 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 Eagle3.717.583.807.74
5AngloGold 1.775.211.905.61
6Kinross Gold 1.884.671.934.82
7Gold Fields2.524.912.735.24
9Hecla Mining4.0515.473.8814.08
13Eldorado Gold1.754.151.814.28
 Average (excl outliers)2.365.432.485.69
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.795.342.955.84
2Rio Tinto2.044.602.084.70
5Anglo American1.414.181.424.22
6Teck Resources2.455.652.515.79
7First Quantum3.328.463.318.45
 Average (excl outliers)1.965.331.995.48

We are maintaining our metal price forecasts.

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,925$1,900$1,400
Silver (US$/oz)$24.34$22.50$18.00
Copper (US$/lb)$3.79$3.70$3.00
Zinc (US$/lb)$1.08$1.25$1.10
Nickel (US$/lb)$9.47$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (positive):

– Sweden is planning to lift its ban on uranium mining. We believe this is a major milestone for the sector, as Sweden was historically anti-nuclear. The country is planning to build 10+ reactors in the next 20 years. We believe this move is likely to encourage more countries to adopt nuclear power as an alternative energy source. Uranium prices were up 2% last week.

– Despite a wave of adverse news from China, iron prices have surged 16% in the past three weeks – a promising signal. Given that iron is the second largest traded commodity by value (after crude oil), we believe this rise instills optimism for the demand for base metals.

Updates from Resource Companies Under Coverage

Steppe Gold Ltd. / TSX: STGO

PR Title

Completed an updated Preliminary Economic Assessment for the Tres Cruzes oxide gold project (Peru)

FRC Opinion

Neutral – The updated PEA returned an AT-NPV5% of US$158M (previously US$166M), and an AT-IRR of 31% (previously 33%), using US$1,700/oz gold. Resources, mine-life, annual gold production, and the mining method (open-pit) remain unchanged, while CAPEX and cash costs increased slightly.

Golden Minerals Company / TSX: AUMN

PR Title

Completed a PEA for Velardena properties (Durango, Mexico)

FRC Opinion

Positive – The PEA returned an AT-NPV8% of US$88M, and a high AT-IRR of 861%, using US$1,826/oz gold and US$22.71/oz silver. The study was based on a mine-life of 10.5 years, and an initial CAPEX estimate of only $5.5M. Management is aiming to advance the project towards production this year.

Cartier Resources inc. / TSXV: ECR

PR Title

Cuts 15.7 g/t Au over 3 m at the VG zone of the Chimo Mine project

FRC Opinion

Positive – Drilling at the newly identified VG zone continues to return high gold grades over long intervals, potentially expanding the current resource envelope along depth.

Denarius Metals Corp. / TSXV: DSLV

PR Title

Results from an ongoing validation and infill program at the Toral Zn-Pb-Ag project in northern Spain

FRC Opinion

Positive – The Toral zinc-lead-silver project holds a large resource-base, totaling 2 Blbs zinc, 1.2 Blbs lead, and 14.6 Moz silver at attractive zinc+lead grades. All seven holes of a recent infill drill program encountered significant mineralization, including 4.95 m of 22.71% ZnEq, indicating potential for resource upgrade.

SPC Nickel Corp. / TSXV: SPC

PR Title

Intersects 1.27% nickel and 0.47% copper over 18 m at the West Graham project, Sudbury, Ontario

FRC Opinion

Positive – Phase two drilling continues to return high nickel grades over wide intervals, expanding the historic mineralized area. This program supports an upcoming maiden NI 43-101 compliant resource, expected by the end of 2023.

Churchill Resources Inc. / TSXV: CRI

PR Title

Anomalous Ni-Cu-Co soil samples on the margin of the Taylor Brook Gabbro complex (Canada)

FRC Opinion

Neutral – Although these samples returned lower grades compared to the high-grade intercepts of a recent drill program, we believe they have expanded the known mineralized area.

Skyharbour Resources Ltd. / TSXV: SYH

PR Title

Azincourt Energy (TSXV: AAZ) receives results from its 2023 drill program at the East Preston uranium project, Athabasca Basin, Saskatchewan

FRC Opinion

Negative – While this drill program did intersect clay content commonly found within uranium deposits, it failed to encounter any significant intercepts.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were up 0.2% on average last week (down 13% in the previous week).

August 28, 2023
Binance Coin-11%3%-21%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.1T, down 11% MoM, but up 11% YoY.

total crypto

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 6.3x (previously 6.6x).

EV/R of Crypto Companies

ev r of crypto

Source: S&P Capital IQ/FRC

August 28, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.5
BIGG DigitalCSE: BIGG10.7
Canaan Inc. NASDAQ: CAN0.6
Coinbase GlobalNASDAQ: COIN6.2
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE3.8
Marathon Digital HoldingsNASDAQ: MARA14.2
Hut 8 Mining Corp. TSX: HUT7.8
Riot BlockchainNASDAQ: RIOT6.5

Source: S&P Capital IQ/FRC

Key sector developments are listed below (mixed):

  – Mastercard is ending its Binance-branded cards, used for crypto payments, following Visa’s (NYSE: V) earlier disassociation. While Mastercard has refrained from stating explicit reasons, we speculate that the move is linked to the heightened regulatory scrutiny of crypto platforms. We believe that this lack of confidence not only impacts Binance, but also other crypto exchanges.

  – The US government is introducing new crypto tax reporting rules, requiring exchanges and payment processors to provide additional user information to the Internal Revenue Service. This move aligns with regulatory efforts to clamp down on crypto users evading tax payments. We believe this action enhances the sector’s credibility.

  – South Korea has announced that crypto exchanges operating in the country will be required to maintain a minimum reserve fund in designated bank accounts. We believe this move will eliminate fly-by-night operations.

Weekly Cannabis Commentary


Cannabis Industry Performance

August 28, 2023

Source: FRC/Yahoo Finance

Last week, U.S. cannabis stocks underperformed their Canadian peers (-4% vs -1%). U.S. stocks had outperformed in the week prior to last.


Canadian cannabis stocks are trading at a 5% premium on average (previously 13%) relative to their U.S. peers.

Aug 21, 2023Aug 28, 2023
Canadian CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.2NM1.1NM
Canopy Growth Corp.TSX: WEED2.5NM2.3NM
Organigram Holdings Inc.TSX: OGI0.7NM0.6NM
Tilray Inc.NASDAQ: TLRY3.2NM2.9NM
U.S. CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.316.32.316.6
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied Premium (Canada vs U.S.) (Average)13%5%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R


Source: S&P Capital IQ, FRC

Psychedelic Industry Performance

Psychedelic stocks were down 3% on average last week (down 1% in the previous week).

August 28, 2023
Atai Life Sciences N.V.-41%-3%-66%
COMPASS Pathways plc13%-1%-46%
Cybin Inc.-24%1%-70%
Delic Holdings Corp.-85%-2%-86%
GH Research6%-5%-36%
Mind Medicine Inc.29%-7%-68%
Numinus Wellness Inc.-14%6%-48%
Seelos Therapeutics Inc.60%-11%-6%

Source: TMX Money, FRC

tesla survey

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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 STGX. 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:

Rio2 Limited (RIO.V), Golden Minerals Company (AUMN.TO), Millennial Potash Corp. (MLP.V), New Age Metals Inc. (NAM.V), Giga Metals Corporation (GIGA.V), Steppe Gold Ltd. / TSX: STGO, Golden Minerals Company / TSX: AUMN, Cartier Resources inc. / TSXV: ECR, Denarius Metals Corp. / TSXV: DSLV, SPC Nickel Corp. / TSXV: SPC, Churchill Resources Inc. / TSXV: CRI, Skyharbour Resources Ltd. / TSXV: SYH