Analysts’ Ideas Of The Week


equity market


  1. Our predictions for the upcoming Fed meeting
  2. A leading indicator of potential weakness in demand for base metals
  3. A gold junior under coverage is pursuing a $30M equity financing, after attracting a $70M debt financing package from ING Capital (ENXTAM: INGA) and Macquarie Bank (ASX: MQG)
  4. Russia is launching a pilot Central Bank Digital Currency (CBDC) program
  5. Canadian cannabis stocks are trading at an 11% discount on average relative to their U.S. peers.

FRC Top Picks

The following table shows last week’s top five performers among our Top Picks, including four junior resource companies, and an oilfield services company. The top performer, Western Exploration Inc. (TSXV: WEX), was up 10.2%. WEX is advancing a near-surface/high-grade oxide gold project in Nevada towards a pre-feasibility study. Our prior reports can be viewed here.

Top 5 Weekly PerformersWoW Returns
Western Exploration Inc. (WEX.V)10.2%
New Age Metals Inc. (NAM.V)10.0%
South Star Battery Metals Corp. (STS.V)9.6%
Transition Metals Corp. (XTM.V)7.7%
Enterprise Group, Inc. (E.TO)7.5%
* Past performance is not indicative of future performance (as of July 24, 2023)

Last week, companies on our Top Picks list were down 1.9% on average vs -2.4% for the benchmark (TSXV).

top picks portfolio
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)3.2%2.1%-6.1%-23.8%-27.7%48.1%-23.3%
Private CompaniesN/AN/AN/AN/A6.7%20.5%30.5%
Portfolio (Total)-1.9%-0.2%-12.8%-21.6%-13.6%6.8%9.9%
Benchmark (Total)-2.4%2.0%0.1%-2.0%0.4%-13.8%-31.1%
Portfolio (Annualized)-----13.6%2.2%1.0%
Benchmark (Annualized) ----0.4%-4.8%-3.8%

1. Since the earliest initiating date of companies in the list of Top Picks (as of July 24, 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 (up 1.7% in the prior week). Both the Fed and the European Central Bank (ECB) are expected to raise their benchmark rates by 25 bp in their meetings this week. As inflation is cooling, we believe the Fed is unlikely to pursue further rate hikes after the upcoming meeting. We are anticipating dovish comments from the Fed, which should boost equities, and weaken the US$.

AIW Top Picks

Source: FRC/Various

Metal prices retreated 0.3% on average amid a stronger US$.


Valuations of gold producers were down 1% last week (up 9% in the prior week); base metal producers were up 0.1% last week (up 8% in the prior week).

gold producer
base metals
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
4Agnico Eagle4.198.574.208.63
6Kinross Gold 2.145.472.135.43
7Gold Fields3.
9Hecla Mining4.7114.704.6514.14
13Eldorado Gold2.425.782.385.67
 Average (excl outliers)2.806.402.776.34
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 3.075.812.985.70
2Rio Tinto2.355.222.335.25
5Anglo American1.514.321.554.41
6Teck Resources2.315.122.355.29
7First Quantum3.538.833.568.94
 Average (excl outliers)2.105.532.095.57

We are maintaining our metal price forecasts.

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,960$1,875$1,400
Silver (US$/oz)$24.41$22.00$18.00
Copper (US$/lb)$3.87$3.50$3.00
Zinc (US$/lb)$1.07$1.25$1.10
Nickel (US$/lb)$9.52$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (mixed):

– Oil major Chevron Corp. (NYSE: CVX) has disclosed that it is considering adding lithium projects to its portfolio. We believe this statement reaffirms our forecast for a near-term surge in M&A transactions in the EV metals space.

– Last week, major global banks lowered their GDP forecasts for China, citing a slower-than-expected rebound in economic activities in Q2. We view this as a leading indicator of potential weakness in demand for base metals.

Updates from Resource Companies Under Coverage

Verde Agritech Plc/ TSX: NPK

 PR Title

Products remove carbon dioxide from the air

FRC Opinion

Positive – A third-party study has indicated that a tonne of Verde’s products can potentially extract 120 kg of carbon dioxide through Enhanced Rock Weathering (ERW). ERW involves artificially accelerating the natural weathering of rocks to remove and sequester carbon dioxide from the atmosphere. This study indicated that Verde can potentially generate revenue by selling carbon credits. MarketsandMarkets (a global market research firm) estimates that the global carbon credit market will grow from $415B this year, to $1.60T by 2028, reflecting a CAGR of 31.0%. Verde has retained a consultancy firm to conduct a detailed analysis of the potential overall carbon footprint of its products.

Contango Ore, Inc./ NYSEAM: CTGO

PR Title

Announces a US$30M equity financing

FRC Opinion

Positive – Upon completing this financing, CTGO will be fully funded to advance the Manh Choh project in Alaska to production next year. CTGO has also secured a US$70M debt financing package from ING Capital and Macquarie Bank. Kinross Gold (NYSE: KGC) owns 70%, and Contango owns 30% of the project.

Golden Minerals Company/ NYSE: AUMN  

PR Title  

Reports Q2 gold production

FRC Opinion

Positive – Q2 production from the Rodeo mine (Mexico) was down 13% QoQ, but exceeded our forecast by 105%, due to higher than expected grades. H1-2023 production was 4.1 Koz AuEq vs management’s  full year guidance of 4k-4.2k oz. We are expecting management to raise their guidance. We will produce an update report when Q2 financials are published in the coming weeks. The company is focused on commencing operations at Velardeña: a silver-gold-lead-zinc mine in Mexico.

Millennial Potash Corp. / TSXV: MLP

PR Title

Reports drill hole resampling results, confirming robust potash horizons of up to 28.8 m (Gabon); announces a $2M private placement

FRC Opinion

Positive – Promising results, confirming attractive grades and widths. An upcoming drill program will test potash mineralization along depth, intercepted by historical holes.

ION Energy Ltd. / TSXV: ION

PR Title

Completes a $1M private placement

FRC Opinion

Positive – Proceeds will be used to complete a maiden resource estimate at its Urgakh Naran project in Mongolia, and to conduct exploration at the recently acquired Bliss Lake lithium pegmatite project in Canada.

Transition Metals Corp. / TSXV: XTM

PR Title

Completes a ground fixed loop electromagnetic survey

FRC Opinion

Positive – This survey has delineated a large conductive target, near a previously identified anomaly at its Maude Lake nickel-copper-cobalt-PGM property. Management is planning a follow-up exploration program.

Financials, Technology, Energy, and Special Situations

Bitcoin Well, Inc/TSXV: BTCW

PR Title

Announces a $2.5M private placement

FRC Opinion

Positive – Proceeds will be used to expand its crypto ATM network in Canada. BTCW also operates an online platform, allowing investors/traders to buy/sell cryptos. Unlike conventional crypto exchanges, BTCW does not hold private keys or funds, making it a non-custodial crypto platform. This feature offers users full control over their holdings.

Captiva Verde Land Corporation/ CSE: PWR 

 PR Title

Signs a binding LOI to acquire an undisclosed professional sports team

FRC Opinion

Neutral – PWR is paying US$1.5M in cash, and US$1.2M in shares. As details of the target were not disclosed, we are not in a position to comment on this transaction. The company is also pursuing a $2.9M equity financing. PWR has not provided any updates on its other business lines. We are continuing to refrain from assigning a  rating or fair value estimate.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were down 5% on average last week (up 10% in the previous week).

July 24, 2023
Binance Coin-3%-3%-9%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.2T, up 2% MoM, and 16% YoY.

total crypto

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 10.0x (previously 10.4x).

EV/R of Crypto Companies

ev r of crypto

Source: S&P Capital IQ/FRC

July 24, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.7
BIGG DigitalCSE: BIGG13.8
Canaan Inc. NASDAQ: CAN0.9
Coinbase GlobalNASDAQ: COIN8.2
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE4.5
Marathon Digital HoldingsNASDAQ: MARA29.7
Hut 8 Mining Corp. TSX: HUT9.4
Riot BlockchainNASDAQ: RIOT12.4

Source: S&P Capital IQ/FRC

Key sector developments are listed below (negative):

 – Russia is launching a pilot Central Bank Digital Currency (CBDC) program next month.

 – South Korean crypto lending firm Delio has suspended withdrawals following the seizure of its assets by local financial regulators, in connection with an ongoing investigation.

Weekly Cannabis Commentary


Cannabis Industry Performance

July 24, 2023

Source: FRC/Yahoo Finance

Last week, U.S. cannabis stocks underperformed their Canadian peers (-7% vs 2%). U.S. stocks had underperformed in the week prior to last as well.


Canadian cannabis stocks are trading at an 11% discount on average (previously 14%) relative to their U.S. peers.

Jul 17, 2023Jul 24, 2023
Canadian CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora   Cannabis Inc.TSX: ACB1.2NM1.2NM
Canopy Growth Corp.TSX: WEED2.4NM2.5NM
Organigram Holdings Inc.TSX: OGI0.9NM0.6NM
Tilray Inc.NASDAQ: TLRY2.2NM2.2NM
U.S.   CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco   Labs Inc. OTC:   CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.818.02.617.2
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied   Premium (Canada vs U.S.) (Average)-14%-11%

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 (down 1% in the previous week).

July 24, 2023
Atai Life Sciences N.V.-22%-6%-45%
COMPASS Pathways plc9%-4%-41%
Cybin Inc.-6%-10%-30%
Delic Holdings Corp.-93%-3%-93%
GH Research31%-3%10%
Mind Medicine Inc.51%6%-57%
Numinus Wellness Inc.0%-14%-16%
Seelos Therapeutics Inc.102%-7%54%

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:

Western Exploration Inc. (WEX.V), New Age Metals Inc. (NAM.V), South Star Battery Metals Corp. (STS.V), Transition Metals Corp. (XTM.V), Enterprise Group, Inc. (E.TO), Verde Agritech Plc, Contango Ore, Inc.NYSEAM: CTGO, Golden Minerals Company/ NYSE: AUMN, Millennial Potash Corp. / TSXV: MLP, ION Energy Ltd. / TSXV: ION, Transition Metals Corp. / TSXV: XTM, Bitcoin Well, Inc/TSXV: BTCW, Captiva Verde Land Corporation/ CSE: PWR .