Analysts’ Ideas Of The Week


equity market


  1. Four reasons behind the pullback in equity markets and metal prices last week
  2. Promising news for miners/explorers in Canada and Argentina
  3. A lithium junior under coverage has launched a A$130M equity financing, following a promising maiden drill program
  4. Elon Musk’s SpaceX & Bitcoin
  5. Primary obstacles to widespread crypto adoption

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, Transition Metals Corp. (TSXV: XTM), was up 12.5%. XTM is a multi-commodity explorer, with properties spread out across Canada. Our prior reports can be viewed here.

Top 5   Weekly PerformersWoW Returns
Transition Metals Corp. (XTM.V)12.5%
South Star Battery Metals Corp. (STS.V)11.1%
E3 Lithium Limited (ETL.V)6.8%
Hemostemix Inc. (HEM.V)3.6%
Verde Agritech Ltd. (NPK.TO)3.0%
* Past performance is not indicative of future performance (as of August 21, 2023)

Companies on our Top Picks list are up 10% on average since we initiated coverage vs -34% for the benchmark (TSXV).

AIW Top Picks
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)0.1%4.9%2.9%-21.9%-23.1%42.7%-22.4%
Private CompaniesN/AN/AN/AN/A6.7%20.5%30.5%
Portfolio (Total)-4.7%-8.3%-11.4%-18.0%-15.1%-4.4%9.9%
Benchmark (Total)-3.6%-5.1%-4.4%-6.5%-9.5%-20.7%-34.0%
Portfolio (Annualized)-----15.1%-1.5%1.0%
Benchmark (Annualized) -----9.5%-7.4%-4.2%

1. Since the earliest initiating date of companies in the list of Top Picks (as of August 21, 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 (down 0.4% in the prior week), amid robust U.S. retail sales data, hawkish comments from the Fed, stronger than expected industry output and employment data from Europe, and lower than expected rate cuts by China. We believe the market’s concerns regarding rising interest rates is understandable, given the Fed’s focus on inflation. However, we anticipate that growing financial vulnerabilities, resulting from elevated rates, will compel the Fed to cut rates within six months.

AIW Top Picks

Source: FRC/Various

Metal prices were down 0.9% on average (down 2.4% in the previous week) amid a stronger US$.


Valuations of gold producers were down 6% last week (down 1% in the prior week); base metal producers were down 4% last week (down 4% in the prior week as well).

gold producer
base metals
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
4Agnico Eagle3.928.023.717.58
5AngloGold 1.945.701.775.21
6Kinross Gold 2.034.961.884.67
7Gold Fields2.785.342.524.91
9Hecla Mining4.2216.114.0515.47
13Eldorado Gold1.854.351.754.15
 Average (excl outliers)2.525.802.365.43
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.915.562.795.34
2Rio Tinto2.114.732.044.60
5Anglo American1.504.331.414.18
6Teck Resources2.505.762.455.65
7First Quantum3.569.053.328.46
 Average (excl outliers)2.055.561.965.33

We are maintaining our metal price forecasts.

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,889$1,900$1,400
Silver (US$/oz)$23.17$22.50$18.00
Copper (US$/lb)$3.76$3.70$3.00
Zinc (US$/lb)$1.02$1.25$1.10
Nickel (US$/lb)$8.97$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (positive):

– According to a report by Chile’s Centre for Copper and Mining Studies (CESCO), state-owned Codelco, the world’s largest copper producer, is facing insolvency risks due to rising costs, declining production, and a leveraged balanced sheet. Codelco has denied this allegation, and asserted that the company maintains a “solid financial position”. In any case, we note that supply chain vulnerabilities can positively influence prices.

– Salta, a mineral rich province in northwestern Argentina, is evaluating options to streamline processes concerning environmental and social impact assessments for mining. If implemented, we believe this move would significantly benefit juniors in the province, such as Argentina Lithium & Energy Corp.

 – Ford (NYSE: F) is building a $1.2B plant in Quebec to produce EV battery materials. The federal and provincial governments are providing loans totaling $0.6B for construction. We view this as a significant step towards Canada’s goal of becoming a leading global hub for EV battery metals.

Updates from Resource Companies Under Coverage

Azure Minerals Limited / ASX: AZS

PR Title

Launches equity financings for up to A$130M

FRC Opinion

Positive – These financings, targeting institutional investors, follow a highly promising maiden drill program at the Andover (lithium) project in Australia. Proceeds will be used for additional drilling, and for completing a maiden resource estimate and a PEA. We are anticipating a large tonnage/high-grade resource estimate. Shares are up 522% since our last update report in April 2023, and 2,640% since we launched coverage in July 2019.

Tudor Gold Corp. / TSXV: TUD

PR Title

Continues to expand the Goldstorm deposit (B.C.); a step-out hole intersected 1.48 g/t AuEq over 210 m, within 516 m grading 1.19 g/t.

FRC Opinion

Positive – Drilling has expanded the known mineralized area of Goldstorm, indicating resource expansion potential. We note that the project already has a large resource-base totaling 31 Moz AuEq.

Denarius Metals Corp. / TSXV: DSLV

PR Title

Announces results from phase-three validation drilling and metallurgical testing at the polymetallic Lomero project in Spain, including 13.9 m grading 1.19% copper, 0.76% lead, 2.46% zinc, 31 g/t silver, and 4.52 g/t gold

FRC Opinion

Positive – Lomero has inferred resources totalling of 0.7 Moz gold, 7.4 Moz silver, 106 Mlbs copper, 240 Mlbs zinc, 96 Mlbs lead, derived solely from a phase 1 drill program. Phase 2 and 3 drill programs have returned promising results, which we believe will positively impact an upcoming resource update, and a PEA.

South Star Battery Metals Corp. / TSXV: STS

PR Title

Announces initial drilling results for the BamaStar graphite project in Alabama

FRC Opinion

Positive – Promising results; all the holes drilled to date have intersected significant intervals of graphite mineralization at shallow depths, potentially expanding the current resource envelope. Management plans to complete a PEA by Q1-2024.

ION Energy Limited / TSXV: ION

PR Title

Acquires a new Canadian exploration asset

FRC Opinion

Positive – ION has acquired its second lithium project in Canada through staking. Pegmatites (lithium) have been identified on the property. We believe this acquisition diversifies the company’s portfolio, as the flagship projects are in Mongolia.

NV Gold Corporation / TSXV: NVX

PR Title

Reports positive drill results from the Triple T gold project, Nevada

FRC Opinion

Positive – 10 out of 14 holes intersected near-surface quartz veins, including 4.57 m of 2.4 g/t Au, delineating a 250 m x 400 m mineralized area. Triple T is prospective for epithermal (high-grade/shallow) gold mineralization.

New Age Metals Inc. / TSXV: NAM

PR Title

Attracts a partner to explore the McLaughlin Lake lithium project in Manitoba

FRC Opinion

Positive – Pleased to see NAM following through with its plan to attract partners for its non-core assets. The McLaughlin property hosts pegmatites over a strike length of 30 km, but has never been drill tested.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were down 13% on average last week (up 1% in the previous week).

August 21, 2023
Binance Coin-14%-13%-13%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.1T, down 12% MoM, but up 3% YoY.

total crypto

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 6.6x (previously 8.0x).

EV/R of Crypto Companies

ev r of crypto

Source: S&P Capital IQ/FRC

August 21, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.6
BIGG DigitalCSE: BIGG10.7
Canaan Inc. NASDAQ: CAN0.6
Coinbase GlobalNASDAQ: COIN6.1
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE4.1
Marathon Digital HoldingsNASDAQ: MARA15.0
Hut 8 Mining Corp. TSX: HUT8.3
Riot BlockchainNASDAQ: RIOT7.0

Source: S&P Capital IQ/FRC

Key sector developments are listed below (negative):

  – Bitcoin prices were negatively impacted on news that Elon Musk’s SpaceX has divested its Bitcoin holdings.

 – Blockchain analytics firm TRM Labs reported that North Korean hackers have stolen more than US$2B in cryptos in the past five years, including US$1B in the past 20 months. We note that ransomware and hacks continue to pose significant threats to the sector, and act as key deterrents for mass adoption.

Weekly Cannabis Commentary


Cannabis Industry Performance

August 21, 2023

Source: FRC/Yahoo Finance

Last week, U.S. cannabis stocks outperformed their Canadian peers (1% vs -0.4%). U.S. stocks had underperformed in the week prior to last.


Canadian cannabis stocks are trading at a 13% premium on average (previously 9%) relative to their U.S. peers.

Aug 14, 2023Aug 21, 2023
Canadian CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.3NM1.2NM
Canopy Growth Corp.TSX: WEED2.3NM2.5NM
Organigram Holdings Inc.TSX: OGI0.6NM0.7NM
Tilray Inc.NASDAQ: TLRY3.2NM3.2NM
U.S. CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.417.02.316.3
Green Thumb Industries Inc.OTC: GTBIF1.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied Premium (Canada vs U.S.) (Average)9%13%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R


Source: S&P Capital IQ, FRC

Psychedelic Industry Performance

Psychedelic stocks were down 1% on average last week (down 4% in the previous week).

August 21, 2023
Atai Life Sciences N.V.-39%-2%-62%
COMPASS Pathways plc13%16%-47%
Cybin Inc.-27%0.3%-63%
Delic Holdings Corp.-85%91%-85%
GH Research12%-3%-20%
Mind Medicine Inc.38%-8%-67%
Numinus Wellness Inc.-21%-6%-46%
Seelos Therapeutics Inc.81%-8%17%

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:

Transition Metals Corp. (XTM.V), South Star Battery Metals Corp. (STS.V), E3 Lithium Limited (ETL.V), Hemostemix Inc. (HEM.V), Verde Agritech Ltd. (NPK.TO), Argentina Lithium & Energy Corp., Azure Minerals Limited / ASX: AZS, Tudor Gold Corp. / TSXV: TUD, Denarius Metals Corp. / TSXV: DSLV, South Star Battery Metals Corp. / TSXV: STS, ION Energy Limited / TSXV: ION, NV Gold Corporation / TSXV: NVX, New Age Metals Inc. / TSXV: NAM,