Analysts’ Ideas Of The Week


equity market


  1. The S&P 500 was up 2.5% last week amid strong macroeconomic data.
  2. Two M&A transactions in the junior resource space
  3. Shares of a fertilizer producer under our coverage were up 17% last week.
  4. A robust Preliminary Economic Assessment from a copper junior under our coverage.
  5. Positive developments in the crypto space

FRC Top Picks

The following table shows last week’s top five performers among our Top Picks, including four junior resource companies, and a biotech company. The top performer Verde Agritech (TSX: NPK), was up 17.9%. Verde is aiming to become one of the largest producers of potash in Brazil. Our prior reports can be viewed here.

Top 5   Weekly PerformersWoW Returns
Verde Agritech Plc. (NPK.TO)17.9%
Panoro Minerals (PML.V)11.5%
E3 Lithium Limited (ETL.V)10.5%
Sirios Resources Inc. (SOI.V)10.0%
Hemostemix Inc. (HEM.V)8.3%
* Past performance is not indicative of future performance (as of July 4, 2023)

Companies on our Top Picks list are up 11% on average since we initiated coverage vs -29% for the benchmark (TSXV).

top picks portfolio
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)2.8%0.0%-3.1%-19.9%-27.7%45.7%-23.2%
Private CompaniesN/AN/AN/AN/A6.7%20.5%30.5%
Portfolio (Total)1.5%-3.4%-10.2%-14.8%-19.2%10.2%11.1%
Benchmark (Total)3.1%2.8%-0.5%9.4%0.6%-5.1%-29.3%
Portfolio (Annualized)-----19.2%3.3%1.1%
Benchmark (Annualized) ----0.6%-1.7%-3.6%

1. Since the earliest initiating date of companies in the list of Top Picks (as of July 04, 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 rallied, and were up 2.5% on average (down 1.8% in the prior week). The S&P 500 was up 2.5% amid new data indicating stronger than expected GDP growth and softer than expected inflation in the U.S. As mentioned last week, we expect equity markets to remain volatile in the coming weeks, until we have more clarity on the future moves of the Fed regarding rate hikes.

AIW Top Picks

Source: FRC/Various

Metal prices were relatively flat last week.


Valuations of gold producers were up 2% last week (down 4% in the prior week); base metal producers were up 3% last week (down 5% in the prior week).

gold producer
base metals
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
4Agnico Eagle3.947.844.038.01
5AngloGold 2.195.852.135.63
6Kinross Gold 1.995.052.045.19
7Gold Fields2.965.642.885.59
9Hecla Mining4.0912.414.2713.25
13Eldorado Gold2.
 Average (excl outliers)2.605.882.646.00
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.935.492.995.64
2Rio Tinto2.204.822.244.95
5Anglo American1.393.831.444.00
6Teck Resources2.164.632.274.95
7First Quantum3.257.923.247.85
 Average (excl outliers)1.955.042.005.18

We are maintaining our metal price forecasts.

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,926$1,875$1,400
Silver (US$/oz)$22.99$22.00$18.00
Copper (US$/lb)$3.79$3.50$3.00
Zinc (US$/lb)$1.07$1.25$1.10
Nickel (US$/lb)$9.13$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (mixed):

China is restricting exports of two rare earth metals: gallium and germanium. These metals are extensively utilized in the manufacturing of semiconductors and electric vehicles. We believe this decision not only exacerbates tensions between China and the West, but also raises concerns regarding the global supply chain of other critical metals for which China is a major supplier including lithium, cobalt, and manganese.

Glencore is acquiring the remaining 18% stake it does not currently own in PolyMet Mining Corp. (TSX: POM/MCAP: US$388M) for US$71M. The offer price represents a significant premium of 167% over POM’s last closing price. PolyMet and Teck Resources (TSX: TECK) are advancing their copper-nickel-cobalt project in Minnesota towards production.

– Develop Global (ASX: DVP/MCAP: $626M) is acquiring lithium junior Essential Metals (ASX: ESS/MCAP :$134M) in an all-share deal valued at  A$153M. The offer price represents a 35% premium over  ESS’ last closing price. We estimate that Develop is paying US$119/t for Essential’s lithium carbonate resources vs the sector average of US$108/t.

Updates from Resource Companies Under Coverage

Hot Chili Limited / ASX: HCH

PR Title

Announces a Preliminary Economic Assessment (PEA) for Costa Fuego (Chile)

 Attracts a US$15M investment from Osisko Gold Royalties (TSX: OR)

FRC Opinion

Positive – The PEA returned an AT-NPV8% of US$1.1B, and an AT-IRR of 21%, using US$3.85/lb copper and US$1,750/oz gold. The project has potential for producing copper-gold for 16 years, with cash costs of US$1.3/lb copper, and an initial CAPEX of US$1B. Shares are trading at only 9% of AT-NPV. The financing from Osisko is a strong vote of confidence for HCH’s management and the Costa Fuego project. We will publish a detailed update shortly.

Southern Silver Exploration Corp. / TSXV: SSV

PR Title

Reports significant recovery of by-product gold in metallurgical tests on the Cerro Las Minitas project, Mexico

FRC Opinion

Positive – These results indicate that gold can be recovered from the project. Previous studies had not included the potential contribution of gold to the project’s economics.

Colibri Resource Corporation / TSXV: CBI

PR Title

Outlines mineralized structures at Banco de Oro and La Bonancita (Sonora); announces a $1M private placement

FRC Opinion

Positive – Multiple outcrops were identified on two targets within the Evelyn/Plomo project. Gold was detected in 70% of the samples collected from one target, and in 73% of the samples from the second target. The proceeds from an ongoing financing will be used to fund working capital and drilling.

Sokoman Minerals Corp. / TSXV: SIC

PR Title

Drilling results from the Moosehead gold project, Newfoundland

FRC Opinion

Negative – Step-out holes generally intersected weakly mineralized structures, with the exception of a hole drilled in the westernmost area of the main mineralized zone, which revealed 2 m of 3.96 gpt gold. A phase-six drill program is underway.

Azure Minerals Limited / ASX: AZS

PR Title

More broad high-grade lithium intersections at Andover (Australia)

FRC Opinion

Positive – Drilling continues to return high lithium grades over wide intervals, such as 90 m of 1.23% Li2O. The company is completing a maiden lithium resource estimate for the project, which already has a delineated nickel/copper/cobalt resource.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were up 5% on average last week (up 5% in the previous week as well).

July 4, 2023
Binance Coin-1%2%5%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.2T, up 5% MoM, and 33% YoY.

total crypto

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 9.6x (previously 8.4x).

EV/R of Crypto Companies

ev r of crypto

Source: S&P Capital IQ/FRC

July 4, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXAN/A
BIGG DigitalCSE: BIGG11.1
Canaan Inc. NASDAQ: CAN0.6
Coinbase GlobalNASDAQ: COIN6.4
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE4.0
Marathon Digital HoldingsNASDAQ: MARA27.4
Hut 8 Mining Corp. TSX: HUT8.6
Riot BlockchainNASDAQ: RIOT8.9

Source: S&P Capital IQ/FRC

Key sector developments are listed below (positive):

Singapore’s central bank has ordered crypto service providers to maintain customer assets in trust accounts to enhance investor protection. We believe this move will reduce the risk of asset loss or misuse, and enable easier asset recovery in the event of insolvency.

South Africa’s regulators are taking measures against unlicensed crypto platforms within the country, warning them of impending enforcement action.

The U.S. District Court for the Northern District of California has ordered crypto exchange Kraken to provide user information to the Internal Revenue Service for an investigation regarding potential tax evasion.

We view all the above developments as positive as a tighter regulatory environment will strengthen investor confidence in the sector.

Weekly Cannabis Commentary


Cannabis Industry Performance

July 4, 2023

Source: FRC/Yahoo Finance

Last week, U.S. cannabis stocks outperformed their Canadian peers (9% vs 4%). U.S. stocks had outperformed in the week prior to last as well.


Canadian cannabis stocks are trading at 27% discount on average (previously 25%) relative to their U.S. peers.

Jun 26, 2023Jul 4, 2023
Canadian CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.2NM1.2NM
Canopy Growth Corp.TSX: WEED2.6NM2.3NM
Cronos Group Inc.TSX: CRON0.0NM0.0NM
HEXO Corp.(Acquired)NYSE: HEXO1.6NM1.6NM
Organigram Holdings Inc.TSX: OGI0.6NM0.5NM
Tilray Inc.NASDAQ: TLRY2.0NM2.2NM
U.S.   CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.415.92.415.9
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied   Premium (Canada vs U.S.) (Average)-25%-27%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R


Source: S&P Capital IQ, FRC

Psychedelic Industry Performance

Psychedelic stocks were up 10% on average last week (down 4% in the previous week).

July 4, 2023
Atai Life Sciences N.V.-29%24%-49%
COMPASS Pathways plc6%8%-26%
Cybin Inc.8%36%-23%
Delic Holdings Corp.-92%-11%-92%
GH Research33%4%18%
Mind Medicine Inc.22%11%-63%
Numinus Wellness Inc.9%2%-13%
Seelos Therapeutics Inc.76%4%62%

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. 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:

Verde Agritech Plc. (NPK.TO), Panoro Minerals (PML.V), E3 Lithium Limited (ETL.V), Sirios Resources Inc. (SOI.V), Hemostemix Inc. (HEM.V), Hot Chili Limited / ASX: HCH, Southern Silver Exploration Corp. / TSXV: SSV, Colibri Resource Corporation / TSXV: CBI, Sokoman Minerals Corp. / TSXV: SIC, Azure Minerals Limited / ASX: AZS.