Analysts’ Ideas Of The Week


equity market


  1. Two M&A deals in the metals and mining sector
  2. A lithium junior under coverage reported bonanza grades; shares are up 108% since we initiated coverage last month
  3. The TSX is exploring entry into the crypto trading space
  4. A key reason for the recent fall in Bitcoin prices
  5. Insights on the latest addition to our biotech coverage

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, Kootenay Silver (TSXV: KTN), was up 18.8%. Kootenay is advancing multiple silver projects in Mexico. Our prior reports can be viewed here.

Top 5 Weekly PerformersWoW Returns
Kootenay Silver Inc. (KTN.V)18.8%
Sirios Resources Inc. (SOI.V)12.5%
Contango Ore Inc. (CTGO)11.5%
Enterprise Group, Inc. (E.TO)10.6%
Millennial Potash Corp. (MLP.V)7.7%
* Past performance is not indicative of future performance (as of September 18, 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)1.6%1.2%3.7%-1.1%-17.4%38.3%-22.1%
Private CompaniesN/AN/AN/AN/A6.7%20.5%30.5%
Portfolio (Total)0.6%-2.0%-7.5%-14.2%-12.1%-2.0%10.2%
Benchmark (Total)1.4%0.5%-3.8%-2.8%-5.9%-18.2%-33.5%
Portfolio (Annualized)-----12.1%-0.7%1.0%
Benchmark (Annualized) -----5.9%-6.5%-4.1%

1. Since the earliest initiating date of companies in the list of Top Picks (as of September 18, 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 0.2% in the prior week). The European Central Bank raised its benchmark rate by 25 bp to a record high, but hinted that it is unlikely to raise rates further. U.S. inflation data was mixed. While the CPI increased (3.2% in July, to 3.7% in August), the core CPI (which excludes the impact of food and energy prices) decreased (4.7% in July, to 4.3% in August). We remain confident that the Fed will keep its rate steady in its upcoming meeting this week.

AIW Top Picks

Source: FRC/Various

Last week, metal prices were up 1% on average (down 2% in the previous week).


Valuations of gold producers were up 4% last week (down 2% in the prior week); base metal producers were up 5% 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 Eagle3.807.753.927.98
5AngloGold 1.845.381.935.74
6Kinross Gold 1.924.792.045.02
7Gold Fields2.695.202.665.20
9Hecla Mining3.6413.223.9415.22
13Eldorado Gold1.924.542.024.77
 Average (excl outliers)2.465.562.565.81
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.985.873.106.09
2Rio Tinto2.124.772.235.11
5Anglo American1.414.201.514.47
6Teck Resources2.535.832.686.19
7First Quantum3.348.533.508.95
 Average (excl outliers)2.005.492.105.77

We are maintaining our metal price forecasts.

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,931$1,900$1,400
Silver (US$/oz)$23.20$22.50$18.00
Copper (US$/lb)$3.80$3.70$3.00
Zinc (US$/lb)$1.15$1.25$1.10
Nickel (US$/lb)$8.86$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (positive):

Last week, the metals and mining sector saw two M&A deals – one in lithium and another in gold – confirming our anticipation of increased M&A activity amid relatively low sector valuations.

Sigma Lithium (NASDAQ: SGML/MCAP: US$4.1B) announced that it has received M&A proposals from multiple entities. SGML owns a lithium project in Brazil.

Victoria Gold Corp. (TSX-VGCX) is set to acquire Sabre Gold Mines’s / TSX: SGLD Brewery Creek project (Yukon) for $13.5M in cash and shares. Brewery Creek hosts 2.1 Moz in gold resources. VGCX is paying $8/oz, which we note is significantly lower than the sector average of $38/oz. That said, Sabre’s shares were also trading at $8/oz prior to the announcement of the transaction, suggesting that VGCX is essentially matching the market’s valuation of Sabre. This cash infusion will aid Sabre in advancing its flagship Copperstone gold project in Arizona.

Updates from Resource Companies Under Coverage

Surge Battery Metals Inc. / TSXV: NILI

PR Title

Lithium assays of up to 8,070 ppm in the first hole of a drill program at the Nevada North lithium project (Nevada)

FRC Opinion

Positive – Promising results; the first hole returned bonanza lithium grades of up to 8,070 ppm, averaging 4,067 pm vs the typical range of 700-2,000 ppm for comparables in the region. We believe these results will positively impact an upcoming maiden resource estimate, expected in the coming months. NILI is up 108% since we initiated coverage last month.

Chatham Rock Phosphate Limited / TSXV: NZP

PR Title

Announces a maiden resource estimate for the Korella North phosphate property in Queensland, Australia

FRC Opinion

Positive – NZP has delineated a small-tonnage/low-grade resource of 80 kt at 13.1% P2O (indicated), and 275 Kt at 13% P2O (inferred). The company is planning to apply for a mining permit, and potentially commence production in 2024.

SPC Nickel Corp. / TSXV: SPC

PR Title

Intersects shallow mineralization grading 1.07% nickel and 0.44% copper over 12.5 m at the West Graham project

FRC Opinion

Positive – Phase two drilling continues to return high nickel grades at shallow depths. This program supports an upcoming maiden NI 43-101 compliant resource, expected in the coming months.

Introducing a Biotech Stock Trading at a 67% Discount

Last week, we commenced due diligence on YS Biopharma Co. (NASDAQ: YS). Here is a brief overview of the company, along with our initial insights. We intend to initiate coverage in the coming weeks.

Formed in 2003, and headquartered in China, YS is a biopharmaceutical company focused on the development and commercialization of vaccines and advanced medical treatments for infectious diseases and cancer. Its portfolio consists of nine biological drugs, including a marketed product in China, four clinical-stage candidates (Singapore/China/the U.S./the Philippines/Pakistan/the UAE), and four pre-clinical candidates targeting rabies, cancer, hepatitis, and influenza. In addition, YS is actively pursuing multiple therapeutic targets and products. YS has 70 patents across 30+ countries.

One Marketed Vaccine + Eight New Generation Vaccine Candidates

Source: Company

Over the past decade, YS has raised $200M+ through institutional financings. Major shareholders include large investment firms such as Fidelity Investments, Hillhouse Capital, and OrbiMed.

Currently, 100% of the company’s revenue comes from its flagship rabies vaccine product in China. Since 2003, the company has sold 100M+ doses, servicing 20M+ patients. YS’ vaccine has a 10% market share, and is among the top three approved rabies vaccines in China.

In FY2023 (ended March 2023), the company generated US$100M in revenue, up 37% YoY. Gross margins have historically ranged between 75% and 80%. However, EBITDA and EPS are yet to turn positive.

YS is targeting large markets. Frost and Sullivan estimates that China’s human rabies vaccine market will grow by 15% p.a., to US$4.6B by 2030. Approximately 50M people in China are bitten by dogs and other rabies carrying animals every year.

We note that YS is trading at 1.6x revenue vs the sector average of 4.9x, implying a 67% discount. The company’s management team purchased 0.5M shares in the open market recently, reflecting their conviction in the stock. 

Source: FRC / S&P Capital IQ

An upcoming catalyst includes the commencement of phase three studies in Singapore, the Philippines, and Pakistan. Based on our initial review, key takeaways for YS include its established presence in China, which provides a consistent revenue stream, its portfolio of multiple clinical-stage vaccine candidates, and a steeply discounted EV/R. 

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were up 6% on average last week (down 5% in the previous week).

September 18, 2023
Binance Coin-11%5%-19%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.1T, down 0.04% MoM, but up 18% YoY.

total crypto

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 6.5x (previously 6.6x).

EV/R of Crypto Companies

ev r of crypto

Source: S&P Capital IQ/FRC

September 18, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.5
BIGG DigitalCSE: BIGG11.2
Canaan Inc. NASDAQ: CAN0.6
Coinbase GlobalNASDAQ: COIN6.9
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE3.5
Marathon Digital HoldingsNASDAQ: MARA15.0
Hut 8 Mining Corp. TSX: HUT7.3
Riot BlockchainNASDAQ: RIOT6.7

Source: S&P Capital IQ/FRC

Key sector developments are listed below (mixed):

  – Ripple’s CEO stated that the U.S.  is among the worst places for launching a crypto startup. Instead, he recommend considering Singapore, the U.K., the UAE, and Switzerland, which have favorable crypto policies.

  – According to CoinShares, the crypto market experienced $54M in outflows last week. Bitcoin (BTC) accounted for 85% of these outflows. Investors have pulled out $455M from crypto funds in the past nine weeks, which we note is a significant factor behind the 12% decline in BTC prices over this period.

 – Sources indicate that the TSX is exploring entry into the crypto trading space, potentially becoming the first traditional stock market to facilitate crypto trading. Rather than building a crypto trading platform from the ground up, we believe the TSX may seek to gain market share through strategic acquisitions.

Weekly Cannabis Commentary


Cannabis Industry Performance

September 18, 2023

Source: FRC/Yahoo Finance

Last week, U.S. cannabis stocks outperformed their Canadian peers (-5% vs -10%). U.S. stocks had outperformed in the week prior to last as well.


Canadian cannabis stocks are trading at a 12% premium on average (previously 1% discount) relative to their U.S. peers.

Sep 11, 2023Sep 18, 2023
Canadian CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.3NM2.4NM
Canopy Growth Corp.TSX: WEED3.7NM4.7NM
Organigram Holdings Inc.TSX: OGI0.7NM0.9NM
Tilray Inc.NASDAQ: TLRY3.7NM3.6NM
U.S. CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.711.31.711.4
Curaleaf Holdings Inc. OTC: CURLF3.223.03.626.0
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied Premium (Canada vs U.S.) (Average)-1%12%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R


Source: S&P Capital IQ, FRC

Psychedelic Industry Performance

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

September 18, 2023
Atai Life Sciences N.V.-48%-7%-63%
COMPASS Pathways plc11%-2%-34%
Cybin Inc.-7%17%-41%
Delic Holdings Corp.-86%30%-88%
GH Research10%7%-15%
Mind Medicine Inc.36%-6%-45%
Numinus Wellness Inc.2%13%-23%
Seelos Therapeutics Inc.23%-17%-31%

Source: TMX Money, FRC

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:

Kootenay Silver Inc. (KTN.V), Sirios Resources Inc. (SOI.V), Contango Ore Inc. (CTGO), Enterprise Group, Inc. (E.TO), Millennial Potash Corp. (MLP.V), Sabre Gold Mines’s / TSX: SGLD , Surge Battery Metals Inc. / TSXV: NILI, Chatham Rock Phosphate Limited / TSXV: NZP, SPC Nickel Corp. / TSXV: SPC, YS Biopharma Co. (NASDAQ: YS)