Analysts’ Ideas Of The Week


Our Outlook for the US$ and Metal Prices


  1. Our take on Newmont’s (NYSE: NEM) acquisition of Newcrest (ASX: NCM).
  2. Why did lithium stocks trend higher last week?
  3. China’s central bank has increased its gold reserves every month since November 2022.
  4. The Bank of Canada is launching public consultation for a potential Central Bank Digital Currency (CBDC).
  5. Binance is ceasing operations in Canada.

FRC Top Picks

The following table shows last week’s top five performers among our Top Picks, including three junior resource companies, an oilfield services company, and a mortgage lender. The top performer, Noram Lithium Corp. (TSXV: NRM), was up 14%. Shares of lithium companies trended higher last week, post the announcement of a US$10.6B merger between Allkem (ASX: AKE) and Livent (NYSE: LTHM). Our prior reports on NRM can be viewed here.

Top 5 Weekly PerformersWoW Returns
Noram Lithium Corp. (NRM.V)14.0%
South Star Battery Metals Corp. (STS.V)11.6%
Enterprise Group, Inc. (E.TO)10.7%
Builders Capital Mortgage Corp. (BCF.V)2.0%
Giga Metals Corporation (GIGA.V)1.9%
* Past performance is not indicative of future performance (as of May 15, 2023)

Companies on our Top Picks list are up 12% on average since we initiated coverage vs -31% for the benchmark (TSXV).

top picks chart
Total   Return1 Week1 mo3 mo6 mo1 yrSince launch
Special Situations (MIC)3.1%-0.2%-20.4%-19.3%-32.1%-21.1%
Private CompaniesN/AN/AN/AN/A6.3%7.1%
Portfolio (Total)-3.0%-7.7%-11.9%-10.0%-27.8%11.9%
Benchmark (Total)-0.6%-3.4%-1.2%3.8%-11.8%-30.5%
Portfolio (Annualized)-----27.8%1.2%
Benchmark (Annualized) -----11.8%-3.8%

1. Since the earliest initiating date of companies in the list of Top Picks (as of May 15, 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 0.2% on average (down 0.2% in the prior week). As mentioned last week, we are expecting weakness in the US$ (as the Fed is relatively less hawkish than global central banks), which should drive metal prices higher in the coming weeks.

current vs pre covid mining chart

Source: FRC/Various

Metal prices retreated amid a stronger US$.

week over week graph
year over year of market
lme chart
shfe chart

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

gold producer
base metal producer
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
4Agnico Eagle4.749.494.519.02
5AngloGold 2.666.822.386.24
6Kinross Gold 2.255.602.245.48
7Gold Fields3.326.473.376.55
9Hecla Mining4.7513.794.3513.94
13Eldorado Gold2.325.562.195.24
 Average (excl outliers)3.066.902.936.62
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.925.402.845.25
2Rio Tinto2.154.552.094.43
5Anglo American1.423.791.363.63
6Teck Resources2.344.942.364.98
7First Quantum3.458.373.167.68
 Average (excl outliers)

We are maintaining our metal price forecasts.

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$2,020$1,875$1,400
Silver (US$/oz)$24.10$22.00$18.00
Copper (US$/lb)$3.74$3.50$3.00
Zinc (US$/lb)$1.14$1.25$1.10
Nickel (US$/lb)$10.03$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (positive):

– Yesterday, Newmont Corporation (MCAP: US$37B) announced a definitive agreement to acquire Newcrest Mining (MCAP: US$17B) for US$18B. NEM and NCM are up 2.5% and 1.5%, respectively, since the announcement. We believe Newmont is overpaying, as the offer price reflects a 31% premium over the sector average EV/R and EV/EBITDA multiples.

– Allkem (MCAP: US$6.4B) and Livent (MCAP: US$4.6B) are combining through an all-stock merger valued at US$10.6B, creating the third largest lithium producer in the world. The Global X Lithium & Battery Tech ETF (NYSE: LIT) is up 4% since this announcement, amid hopes of additional M&A in the sector.

– Tesla (NYSE: TSLA) has commenced construction of a lithium refinery in Texas, that can potentially supply lithium for 1M electric vehicles per year.

– In April 2023, China’s central bank increased its gold reserves by 0.4% MoM, to 2,076 tons. China has increased its reserves every month since November 2022, suggesting rising investment demand and potential weakness in the US$. 

Updates from Resource Companies Under Coverage

Power Nickel Inc./TSXV: PNPN

PR Title

Discovers a new high-grade Cu-Pd-Pt-Au-Ag zone 5 km northeast of its main NISK deposit

FRC Opinion

Positive – PNPN has discovered a new high-grade Cu-PGE zone 5 km northeast of the main NISK deposit. Drilling returned high-grades, such as 7.75 m of 20.76 g/t Pt, 5.71 g/t Pd, 1.47% Cu, and 0.28 g/t Au. We were surprised to see high Pt/Pd values, as the project was previously known for its potential for nickel and copper only. Management is planning  follow-up drilling.

Steppe Gold Limited/ TSX: STGO

PR Title

Completed a $12M equity financing

FRC Opinion

Positive – Eric Sprott invested $1M; STGO’s CEO invested $2M, reflecting management’s positive outlook.

Western Exploration Inc./TSXV:WEX

PR Title

Announces a private placement for up to $5.65M

FRC Opinion

Positive – Proceeds will be used to fund exploration at its Aura gold-silver project in Nevada. The project has a near-surface/high-grade oxide gold resource, and an underground/high-grade sulfide gold resource. Agnico Eagle (NYSE: AEM) is a major shareholder.

Lodestar Battery Metals Corp./TSXV: LSTR

PR Title

Announces a resource estimate for the Penasco Quemado project (Mexico)

FRC Opinion

Positive – LSTR has completed a maiden NI 43-101 compliant inferred/open-pittable resource totaling 6.2 Moz @ 169 gpt silver. Although tonnage is small, we note that this is a high-grade resource. Management is planning resource expansion drilling.

Transition Metals Corp./TSXV: XTM

PR Title

Announces a $1M private placement

FRC Opinion

Positive – Proceeds will be used to fund exploration and working capital. This year, XTM is focused on exploring the Maude Lake nickel-copper-cobalt-PGM property in Ontario, and the Pike Warden gold-silver-copper project in Yukon.

Silver X Mining Corp./TSXV: AGX

PR Title

Q1-2023 production

FRC Opinion

Negative – Q1-2023 production was up 265% YoY, but down 7% QoQ due to lower grades. We were expecting production to be flat QoQ. We will publish an update shortly, introducing our 2023 production/revenue/EPS forecasts.

ION Energy Limited/TSXV: ION

PR Title

Acquires a lithium pegmatite project in Yellowknife

FRC Opinion

Positive – ION can acquire the project for $500k in shares, and by offering a 1% NSR to the seller. Multiple pegmatites (lithium) of up to 300 m in strike length have been identified on the property. We believe this acquisition offers diversification benefits, as the company’s other projects are in Mongolia.

Enertopia Corporation/ CSE: ENRT

PR Title

Reports two high-grade Li zones for advancement

FRC Opinion

Positive – Assays from the last seven holes of a 12-hole program returned highly promising values, including 25 ft of 1,042 ppm Li. We are expecting a maiden resource estimate in the coming weeks.

Hannan Metals/ TSXV: HAN   

PR Title

Closed a $1.8M financing

FRC Opinion

Positive – Teck Resources (TSX: TECK) invested $0.3M, and increased its ownership in HAN from 9.0% to 9.9%.

Starcore International Mines Ltd./ TSX: SAM 

PR Title

2022 production results

FRC Opinion

Neutral – In the 12 months ended April 2023, SAM produced 9.97 Koz AuEq, down 11% YoY, but just 0.7% lower than our estimate.

Financial / Technology / Energy / Special Situations 

Elixinol Wellness Ltd./ASX: EXL

 PR Title

Reports 13% YoY growth in revenue in Q1-2023

FRC Opinion

Negative – Q1 revenue was 3% lower than our estimate. The company has not disclosed EBITDA/EPS. EXL has raised $1.25M of a $2.25M equity financing to fund the acquisition of TSN (announced last year).

Lexaria Bioscience Corp./NASDAQ: LEXX

PR Title

Private placement

FRC Opinion

Positive – LEXX has completed a $2M equity financing. The company is awaiting results of a human clinical oral nicotine study, completed earlier this month.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were flat on average last week (down 4% in the previous week).

May 15, 2023
Binance Coin28%1%1%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.1T, down 12% MoM, and 13% YoY.

total crypto

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 6.1x (unchanged).

EV/R of Crypto Companies

ev r crypto companies

Source: S&P Capital IQ/FRC

May 15, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.7
BIGG DigitalCSE: BIGG8.5
Canaan Inc. NASDAQ: CAN0.5
Coinbase GlobalNASDAQ: COIN4.4
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE1.9
Marathon Digital HoldingsNASDAQ: MARA19.8
Hut 8 Mining Corp. TSX: HUT4.9
Riot BlockchainNASDAQ: RIOT7.9

Source: S&P Capital IQ/FRC

Key sector developments are listed below (negative):

  – Last week, the Bank of Canada announced it is launching public consultation for a potential Central Bank Digital Currency (CBDC). As noted in the past, we believe CBDCs are a threat to private cryptos, such as Bitcoin, Ethereum, and others.

 – Binance is ceasing operations in Canada due to tighter regulatory requirements. Binance is one of several global exchanges that have suspended operations in Canada this year.

Weekly Cannabis Commentary


Cannabis Industry Performance

May 15, 2023

Source: FRC/Yahoo Finance

Last week, U.S cannabis stocks underperformed their Canadian peers (-11.5% vs -2.5%). U.S stocks had outperformed in the week prior to last.


Canadian cannabis stocks are trading at a 7% discount (previously 2% premium) relative to their U.S. peers.

May 08, 2023May 15, 2023
Canadian   CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora   Cannabis Inc.TSX: ACB1.5NM1.3NM
Canopy Growth Corp.TSX: WEED3.3NM2.9NM
Cronos Group Inc.TSX: CRON0.0NM0.0NM
Organigram Holdings Inc.TSX: OGI0.9NM0.7NM
Tilray Inc.NASDAQ: TLRY3.2NM2.8NM
U.S. CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied Premium (Canada vs U.S.) (Average)2%-7%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R

average ev r

Source: S&P Capital IQ, FRC

Source: Provincial Websites, FRC

Psychedelic Industry Performance

Psychedelic Industry Performance

Psychedelic stocks were up 3% on average last week (up 2% in the previous week).

May 15, 2023
Atai Life Sciences N.V.-24%1%-50%
COMPASS Pathways plc6%1%4%
Cybin Inc.-27%-5%-29%
Delic Holdings Corp.-89%-4%-89%
GH Research14%24%9%
Mind Medicine Inc.6%-7%-74%
Numinus Wellness Inc.-26%0%-62%
Seelos Therapeutics Inc.21%19%55%

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:

Noram Lithium Corp. (NRM.V), South Star Battery Metals Corp. (STS.V), Enterprise Group, Inc. (E.TO), Builders Capital Mortgage Corp. (BCF.V), Giga Metals Corporation (GIGA.V), Power Nickel Inc./TSXV: PNPN, Steppe Gold Limited/ TSX: STGO, Western Exploration Inc./TSXV:WEX, Lodestar Battery Metals Corp./TSXV: LSTR, Transition Metals Corp./TSXV: XTM, Silver X Mining Corp./TSXV: AGX, ION Energy Limited/TSXV: ION, Enertopia Corporation/ CSE: ENRT, Hannan Metals/ TSXV: HAN   , Starcore International Mines Ltd./ TSX: SAM , Elixinol Wellness Ltd., Lexaria Bioscience Corp.