Analysts’ Ideas Of The Week


equity market


  1. We are noticing a material shift in the narrative of mainstream outlets
  2. Reasons for our continued bullish outlook on gold and silver prices
  3. Saudi Arabia’s first major foray into mining
  4. The world’s largest copper producer has lowered its 2023 production forecast by 5%
  5. Binance’s latest announcement pleasantly surprised us
  6. Venture capital firm Sequoia is reducing its exposure to cryptos

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, Verde Agritech (TSX: NPK), was up 55.9%, on news that its products can potentially remove carbon dioxide from the air. Our comments on Verde’s announcement can be viewed here.

Top 5 Weekly PerformersWoW Returns
Verde Agritech Plc. (NPK.TO)55.9%
Transition Metals Corp. (XTM.V)53.8%
Fortune Minerals Limited (FT.TO)12.5%
Millennial Potash Corp. (MLP.V)7.9%
Sabre Gold Mines Corp. (SGLD.TO)7.1%
* Past performance is not indicative of future performance (as of July 31, 2023)

Last week, companies on our Top Picks list were up 4.1% on average vs 2.5% for the benchmark.

top picks portfolio
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)0.7%0.8%-4.1%-24.2%-22.2%47.3%-23.2%
Private CompaniesN/AN/AN/AN/A6.7%20.5%30.5%
Portfolio (Total)4.1%0.6%-7.5%-19.0%-12.1%3.8%10.9%
Benchmark (Total)2.5%1.0%3.1%0.2%-3.5%-14.1%-29.2%
Portfolio (Annualized)-----12.1%1.3%1.1%
Benchmark (Annualized) -----3.5%-5.0%-3.5%

1. Since the earliest initiating date of companies in the list of Top Picks (as of July 31, 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 1.4% on average (up 0.9% in the prior week). The IMF has raised its 2023 global GDP growth forecast from 2.8% to 3.0%, while lowering its global inflation forecast from 7.0% to 6.8%. Equities and metal prices reacted positively to this announcement. Interestingly, we are noticing a shift in the narrative of mainstream outlets, as their focus is turning from inflation to the potential downside risks of a high-rate environment. We are sticking to our forecasts, and believe that the Fed is likely to maintain its rate, or even start cutting rates later this year. With yields expected to decline, and inflation likely to remain higher than its historic average through the end of 2024, we maintain a bullish outlook on gold and silver prices.

AIW Top Picks

Source: FRC/Various

Metal prices were up 3.1% on average (down 0.3% in the prior week).  


Valuations of gold producers were down 3% last week (down 1% in the prior week); base metal producers were up 5% last week (up 0.1% in the prior week).

gold producer
base metals
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
4Agnico Eagle4.208.634.098.44
6Kinross Gold 2.135.432.095.35
7Gold Fields3.095.953.116.02
9Hecla Mining4.6514.144.4313.76
13Eldorado Gold2.385.671.934.52
 Average (excl outliers)2.776.342.696.19
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.985.703.105.91
2Rio Tinto2.335.252.335.19
5Anglo American1.554.411.614.84
6Teck Resources2.355.292.636.03
7First Quantum3.568.943.759.55
 Average (excl outliers)2.095.572.195.90

We are maintaining our metal price forecasts.

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,972$1,875$1,400
Silver (US$/oz)$24.83$22.00$18.00
Copper (US$/lb)$4.00$3.50$3.00
Zinc (US$/lb)$1.13$1.25$1.10
Nickel (US$/lb)$9.92$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (mixed):

– A joint venture between Saudi Arabia’s sovereign wealth fund and a state-owned mining company is acquiring 10% of Vale’s (NYSE: VALE) base metals division for US$2.5B. This deal is Saudi Arabia’s first major foray into mining. We expect other oil-dependent nations in the Middle East will take similar steps to diversify their economies.

– The world’s largest copper producer, Chilean state-owned Codelco, has lowered its 2023 production forecast by 5%, amid a rock explosion accident at its largest mine. As Codelco accounts for 7% of global copper production, we anticipate that this incident will reduce global copper supply by 0.4%. The International Copper Study Group estimates that the copper market will shift from a 0.4 Mt deficit in 2022, to a 0.1 Mt deficit in 2023, followed by a 0.3 Mt surplus in 2024. Consequently, we are anticipating downward pressure on prices.

Updates from Resource Companies Under Coverage

Electric Royalties Ltd./ TSXV: ELEC

PR Title

Increases royalty interest on the Penouta tin-tantalum mine in Spain

FRC Opinion

Positive – ELEC has exercised its option to increase its Gross Revenue Royalty (GRR) on the producing Penouta mine from 0.75%  to 1.50%. As Penouta generated $4M in revenue in the last quarter, we believe ELEC is likely to generate $0.24M/year in royalties. ELEC’s portfolio consists of royalty investments in 22 projects. One of the advanced-stage projects (the Authier lithium project held by Sayona Mining/ASX: SYA/MCAP: $1.6B) is expected to be in production later this year, implying potential for ELEC to grow its revenue by approximately 40% in 2024.

Eskay Mining Corp. / TSXV: ESK

PR Title

Identifies new targets, and commences drilling at its Eskay project, Golden triangle, B.C.

FRC Opinion

Positive – ESK has identified six high-priority drill targets. We note that the project is prospective for Volcanogenic Massive Sulfide/VMS deposits. As VMS deposits typically occur in clusters (1-20 Mt), we believe that individual deposits have potential for forming mining districts/camps.

Starcore International Mines Ltd. / TSX: SAM

PR Title

Reports year end 2023 results

FRC Opinion

Mixed – Revenue was down 11% YoY, falling below our estimate by 6%, due to lower than expected production. However, EPS beat our estimate (-$0.10 vs -$0.11) due to lower than expected G&A expenses. We will produce an update report shortly.

Sokoman Minerals Corp. / TSXV: SIC

PR Title

Exploration update – Moosehead gold project, Central Newfoundland

FRC Opinion

Positive – Trenching and a 19-hole drill program have identified several new high-priority targets at SIC’s flagship Moosehead gold project. Management is planning a drill program to test these targets.

Weekly Crypto Commentary

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

July 31, 2023
Binance Coin-1%1%-15%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.2T, down 1% MoM, but up 9% YoY.

total crypto

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 9.8x (previously 10.0x).

EV/R of Crypto Companies

ev r of crypto

Source: S&P Capital IQ/FRC

July 31, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.7
BIGG DigitalCSE: BIGG13.8
Canaan Inc. NASDAQ: CAN0.9
Coinbase GlobalNASDAQ: COIN7.6
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE4.5
Marathon Digital HoldingsNASDAQ: MARA29.4
Hut 8 Mining Corp. TSX: HUT9.0
Riot BlockchainNASDAQ: RIOT12.4

Source: S&P Capital IQ/FRC

Key sector developments are listed below (mixed):

  – The government of Indonesia is launching a national crypto exchange. All crypto transactions in the country will be mandated to occur exclusively on the national exchange,  essentially banning private exchanges.   

 – Binance has obtained a license to operate its crypto trading platform in Dubai. Despite being under investigation by the U.S. SEC, we were pleasantly surprised by Binance’s ability to continue expanding its presence globally.

 – Venture capital firm Sequoia is reducing its exposure to cryptos, by downsizing its crypto funds from $585M to $200M. Sequoia was a significant investor in the defunct crypto exchange FTX. This move did not catch us by surprise, as we had mentioned in a note earlier this month that investors have been shifting their investments from cryptos to AI-based offerings.

Weekly Cannabis Commentary


Cannabis Industry Performance

July 31, 2023

Source: FRC/Yahoo Finance

Last week, U.S. cannabis stocks underperformed their Canadian peers (6% vs 7%). U.S. stocks had underperformed in the week prior to last as well.


Canadian cannabis stocks are trading at a 3% premium on average (previously 11% discount) relative to their U.S. peers.

Jul 24, 2023Jul 31, 2023
Canadian CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.2NM1.3NM
Canopy Growth Corp.TSX: WEED2.5NM2.7NM
Organigram Holdings Inc.TSX: OGI0.6NM0.6NM
Tilray Inc.NASDAQ: TLRY2.2NM2.8NM
U.S. CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.617.22.617.1
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied Premium (Canada vs U.S.) (Average)-11%3%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R


Source: S&P Capital IQ, FRC

Psychedelic Industry Performance

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

July 31, 2023
Atai Life Sciences N.V.-22%0%-41%
COMPASS Pathways plc15%6%-38%
Cybin Inc.-8%-6%-39%
Delic Holdings Corp.-93%7%-94%
GH Research34%4%19%
Mind Medicine Inc.65%11%-50%
Numinus Wellness Inc.0%0%-26%
Seelos Therapeutics Inc.124%7%79%

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. 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), Transition Metals Corp. (XTM.V), Fortune Minerals Limited (FT.TO), Millennial Potash Corp. (MLP.V), Sabre Gold Mines Corp. (SGLD.TO), Electric Royalties Ltd./ TSXV: ELEC, Eskay Mining Corp. / TSXV: ESK, Starcore International Mines Ltd. / TSX: SAM, Sokoman Minerals Corp. / TSXV: SIC