Analysts’ Ideas Of The Week


lithium stock


  1. Our take on the Chilean government’s plans to take controlling interests in lithium projects in the country.
  2. More M&A deals in the mining sector
  3. Shares of a gold junior under coverage were up 15% last week, driven by a robust pre-feasibility study.
  4. China is expanding the target market of its digital yuan pilot program.
  5. Uber (NYSE: UBER) is starting delivery of cannabis products in B.C.

FRC Top Picks

The following table shows last week’s top five performers among our Top Picks, including four junior resource companies, and an AdTech company. The top performer Lumina Gold (TSXV: LUM), was up 15%, as the company announced a robust pre-feasibility study last week. Our prior reports can be viewed here.

Top 5 Weekly PerformersWoW Returns
Lumina Gold Corp. (LUM.V)15.3%
Kidoz Inc. (KIDZ.V)12.5%
Hot Chili Limited (HHLKF)9.1%
Rio2 Limited (RIO.V)7.5%
South Star Battery Metals Corp. (STS.V)5.8%
* Past performance is not indicative of future performance (as of April 24, 2023)

Last week, companies on our Top Picks list were down 3.0% on average vs -3.4% for the benchmark (TSXV). Our top picks have outperformed the benchmark in four out of the seven time periods listed below.

AIW Top Picks
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)-3.8%-0.3%-22.0%-15.6%-41.5%66.6%-21.8%
Private CompaniesN/AN/AN/AN/A6.3%157.4%7.1%
Portfolio (Total)-3.0%4.6%-13.8%-7.8%-32.8%58.9%13.2%
Benchmark (Total)-3.4%-0.3%-2.1%3.9%-26.0%30.4%-31.1%
Portfolio (Annualized)-----32.8%16.7%1.3%
Benchmark (Annualized) -----26.0%9.3%-3.9%

1. Since the earliest initiating date of companies in the list of Top Picks (as of April 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

Equity market and metals prices were relatively flat last week. Last week, global equity markets were down 0.3% on average (up 1.6% in the prior week). The US$ retreated due to higher than expected inflation data in the U.K., and increased odds of the European Central Bank remaining more hawkish than the Fed.

current vs pre covid mining chart

Source: FRC/Various

Zinc underperformed other base metals due to a significant increase in inventory levels on the LME.

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

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

gold producers chart
base metal producers
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
3Polyus n/an/an/an/a
4Agnico Eagle4.639.824.389.31
5AngloGold 2.596.292.596.59
6Kinross Gold 2.275.852.145.39
7Gold Fields3.
13Eldorado Gold2.165.481.975.21
 Average (excl outliers)2.876.672.766.42
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 3.045.572.895.34
2Rio Tinto2.334.982.194.58
5Anglo American1.493.951.423.77
6Teck Resources2.365.002.455.06
7First Quantum3.348.093.147.63
 Average (excl outliers)

We are maintaining our metal price forecasts.  

FRC Forecasts
Current   Price2023E Long-Term (2025+)
Gold (US$/oz)$1,983$1,825$1,400
Silver (US$/oz)$25.12$22.00$18.00
Copper (US$/lb)$4.00$3.50$3.00
Zinc (US$/lb)$1.24$1.25$1.10
Nickel (US$/lb)$10.81$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (positive):

– Last week, the Chilean government announced it would take controlling interests in new lithium leases and permits issued to private companies, while honouring existing leases/contracts. As details were not announced, we believe this announcement has increased risks for lithium players in the country. Note that Chile is one of the largest producers of lithium. Shares of lithium companies, across the globe, retreated; for example, the Horizons Global Lithium Producers Index ETF (TSX: HLIT) is down 5% since this announcement. We believe the market has overreacted on lithium companies operating outside Chile, including companies under our coverage, such as Lithium Chile (its flagship project is in Argentina), Argentina Lithium & Energy Corp. (Argentina), Noram Lithium (U.S.), Enertopia Corporation (U.S.), ION Energy (Mongolia), and E3 Lithium (Canada).

 – African gold miner Asante Gold (CSE: ASE/MCAP: $844M) has rejected a bid from Fujairah Holding (an investment company based in the UAE) to acquire all of its outstanding shares for a 46% premium to ASE’s last closing rice. The offer valued ASE at $957M. ASE’s board stated that the offer is “highly conditional”, as it requires ASE to terminate all of its ongoing financing and M&A discussions with other parties.

 – Australia’s Essential Metals (ASX: ESS/MCAP: A$120M) has rejected a A$136M takeover offer from a joint venture led by China’s Tianqi Lithium (SZE: 002466/MCAP: A$27.3B) and Australian lithium miner IGO Ltd (ASX: IGO/MCAP: A$10.6B). This offer reflected a 36% premium to ESS’s last closing price. ESS holds lithium and gold projects in Western Australia.

As M&A premiums have typically ranged between 20% and 30% historically, we believe these rejections indicate that M&A is heating up, and that there are more active buyers than sellers.

Updates from Resource Companies Under Coverage

Lumina Gold Corp./ TSXV: LUM

PR Title

Announces a positive Pre-Feasibility Study (PFS) on the Cangrejos gold project (Ecuador)

FRC Opinion

Positive – The PFS returned an AT-NPV of US$2.2B, and an AT-IRR of 17%, using  US$1,650/oz gold. LUM is trading at 10% of AT-NPV. We note that Cangrejos holds one of the largest undeveloped gold-copper deposits held by a junior. We will produce an update report shortly.

Silver X Mining Corp./ TSXV: AGX

PR Title

Acquiring the Revenue-Virginius (RV) mine in Colorado out of receivership

FRC Opinion

Positive – AGX can acquire the project for US$4.5M in cash through staged payments. This project was held by Aurcana Silver, a company we used to cover. RV is a high-grade advanced stage silver project, with near-term production potential. A 2018 Feasibility Study had returned an AT-NPV5% of US$75M, using US$18.5/oz silver. We are looking forward to seeing AGX’s plans to advance the project to production. We will produce an update report shortly.

Silver Dollar Resources Inc./CSE: SLV

PR Title

Signs an option agreement with Canasil Resources (TSXV: CLZ)

FRC Opinion

Positive – SLV can acquire CLZ’s Nora property for $375K in cash, and $3M in exploration expenditures over five years. Nora is prospective for epithermal gold-silver deposits. Past drilling has returned high gold, silver, and copper grades over significant intervals.

GoviEx Uranium Inc./TSXV: GXU

PR Title

Announces a $15M bought deal financing

FRC Opinion

Positive – Proceeds will be used to fund exploration and working capital. GXU has multiple advanced-stage uranium projects in Africa. Based on EV/lb, we note that GXU is one of the most undervalued uranium juniors in our list.

Golden Minerals Company/ NYSE / TSX

PR Title

Q1-2023 gold production

FRC Opinion

Positive – Production was down 14% QoQ, to 2.2 Koz AuEq, but in line with our estimate. Management is expected to make a production decision on Velardeña by mid-2023, which we believe has potential to be the next major catalyst.

Hannan Metals/ TSXV: HAN   

PR Title

Announced a $1.3M equity financing


FRC Opinion

Positive – Proceeds will be used to fund exploration at its Peruvian, Chilean, and Irish projects.

Financial / Technoloy / Energy / Special Situations 

Ocean Biomedical Corp./NASDAQ: OCEA

 PR Title

U.S. patent for lung fibrosis therapeutics

FRC Opinion

Positive – One of its drug candidates has received a positive response from the U.S. Patent and Trademark Office (USPTO). Management is expecting to receive a patent in the coming months. OCEA is an incubator that partners with inventors, universities, and research institutions to potentially commercialize their discoveries for medical treatments. OCEA is in the process of submitting applications to the U.S. Food and Drug Administration (FDA) to commence human clinical trials.

Weekly Crypto Commentary

Prices of mainstream/popular cryptos were down 10% on average last week (up 7% in the previous week).

April 24, 2023
Binance Coin34%-3%-17%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.2T, up 0.9% MoM, but down 33% YoY.

total crypto market cap

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 5.4x (previously 6.5x).

EV/R of Crypto Companies

ev r crypto companies

Source: S&P Capital IQ/FRC

April 24, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.7
BIGG DigitalCSE: BIGG7.8
Canaan Inc. NASDAQ: CAN0.5
Coinbase GlobalNASDAQ: COIN4.1
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE2.1
Marathon Digital HoldingsNASDAQ: MARA18.5
Hut 8 Mining Corp. TSX: HUT3.5
Riot BlockchainNASDAQ: RIOT6.0

Source: S&P Capital IQ/FRC

Key sector developments are listed below (positive):

– China is expanding the target market of its digital yuan pilot program by rolling it out in multiple cities.

– Switzerland-based financial firm Syz Group and CMCC Global (a venture capital firm in Hong Kong) are launching a $50M fund to invest in hedge funds focused on cryptos.

Weekly Cannabis Commentary


Cannabis Industry Performance

April 24, 2023
U.S. CompaniesYTD1-Week1-Year
Cresco Labs Inc. -27%-10%-74%
Curaleaf Holdings Inc. -49%-12%-65%
Green Thumb Industries Inc.-23%-8%-58%
Trulieve Cannabis Corp.-33%-6%-69%
Canadian CompaniesYTD1-Week1-Year
Aurora Cannabis Inc.-35%-8%-79%
Canopy Growth Corp.-43%-10%-75%
Cronos Group Inc.-28%-7%-37%
HEXO Corp.15%-2%-78%
Organigram Holdings Inc.-37%-7%-63%
Tilray Inc.-14%-5%-53%
Canadian Average-24%-6%-64%
U.S. Average-33%-9%-67%

Source: FRC/Yahoo Finance

Last week, U.S cannabis stocks underperformed their Canadian peers (-9% vs  -6%). U.S stocks had outperformed in the week prior to last.

 Key sector developments are listed below (mixed):

– A new report from the U.S. Department of Agriculture (USDA) indicated that hemp production was down 71% YoY in 2022, due to regulatory uncertainty.

– Uber (NYSE: UBER) is partnering with Leafly (NASDAQ: LFLY) to offer delivery of cannabis products in B.C.


Canadian cannabis stocks are trading at a 2% premium (previously 0% premium) relative to their U.S. peers.

April 17, 2023April 24, 2023
Canadian   CompaniesTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.4NM1.4NM
Canopy Growth Corp.TSX: WEED3.4NM3.4NM
Cronos Group Inc.TSX: CRON0.0NM0.0NM
Organigram Holdings Inc.TSX: OGI1.0NM0.9NM
Tilray Inc.NASDAQ: TLRY2.8NM2.7NM
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)0%2%

Source: S&P Capital IQ, FRC

                                                                                       Average EV/R

average ev r

Source: S&P Capital IQ, FRC

Canadian Retail Cannabis Stores

Currently, there are 3,488 retail cannabis stores in Canada, a decrease of 24 stores WoW, including 25 closures in ON, and one new store in B.C.

                                                                                     Nationwide Store Count

store count

Source: Provincial Websites, FRC

Geographic RegionStore CountStore CountStore CountStore CountPopulationPopulation / Store
Alberta 756 757 756 756 4,428,247 5,857
B.C. 431 432 488 489 5,120,184    10,471
Manitoba 151 151 167 167 1,379,121 8,258
N.B. 20 20 25 25 780,890    31,236
N.S. 37 37 46 46 978,274    21,267
Newfoundland 40 40 39 39 520,437   13,345
Northwest Territories 6 6 6 6 44,982 7,497
Nunavut 39,486
Ontario 1,517 1,519 1,725 1,700 14,745,040 8,674
P.E.I. 4 4 4 4 158,717    39,679
Quebec 87 87 89 89 8,552,362    96,094
Saskatchewan 130 130 161 161 1,181,987 7,342
Yukon 7 7 6 6 41,293 6,882
CANADA 3,186 3,190 3,512 3,488 37,971,020   10,886

Source: Provincial Websites, FRC

Psychedelic Industry Performance

Psychedelic Industry Performance

Psychedelic stocks were down 8% on average last week (up 4% in the previous week).

April 24, 2023
Atai Life Sciences N.V.-27%0%-61%
COMPASS Pathways plc3%-18%-32%
Cybin Inc.-20%-15%-53%
Delic Holdings Corp.-84%-14%-91%
GH Research-17%-4%-51%
Mind Medicine Inc.25%6%-71%
Numinus Wellness Inc.-39%-8%-62%
Seelos Therapeutics Inc.1%-11%-2%

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:

Lumina Gold Corp. (LUM.V), Kidoz Inc. (KIDZ.V), Hot Chili Limited (HHLKF), Rio2 Limited (RIO.V), South Star Battery Metals Corp. (STS.V), Lumina Gold Corp./ TSXV: LUM, Silver X Mining Corp./ TSXV: AGX, Silver Dollar Resources Inc./CSE: SLV, GoviEx Uranium Inc./TSXV: GXU, Golden Minerals Company/ NYSE / TSX, Hannan Metals/ TSXV: HAN, Ocean Biomedical Corp.,