Analysts' Ideas of the Week
Denarius Nears Production, Zepp Health's New Smartwatch, and Key Cobalt & Gold Updates
ByFRC Analysts
Disclosure: Articles and research coverage are paid for and commissioned by issuers. See the bottom for other important disclosures, rating, and risk definitions, and specific information.
Highlights
In this edition, we analyze the performance of our top picks, including an advanced stage potash junior, whose shares rose 7% last week. We also highlight a major milestone for a near-term junior miner, key announcements from advanced-stage cobalt and gold juniors, and updates from a biotech company. Additionally, we cover Zepp Health’s latest smartwatch, designed for fashion-conscious, health-focused consumers.
Highlights
- Gain insights into companies under coverage that experienced significant developments last week, along with our analysts' commentary and actionable takeaways.
- FRC top picks and standout performers from the past week
PR Title: Obtained approval for the environmental impact study (EIS) of its Zancudo project (Colombia)
Analyst Opinion: Positive – The EIS approval enables DMET to commence production at its Zancudo gold-silver project in Colombia. A 2023 PEA demonstrated strong economics, with an AT-NPV5% of US$206M, and a very high AT-IRR of 287%, using US$1,800/oz gold, and US$22/oz silver. DMET’s MCAP of US$42M, and enterprise value of US$74M, indicate that the market is not only undervaluing Zancudo, but also assigning zero value to DMET’s other flagship assets. In addition to Zancudo, the company plans to advance the Aguablanca nickel-copper project in Spain to production this year. DMET has already secured offtake agreements for both projects. The company expects its Water Concession application for the Aguablanca project to be approved in the coming months, enabling de-watering and preparation of the underground mine for production. With a well-maintained 5,000 tpd processing plant, the project can be brought into production with a modest initial CAPEX of US$6.1M. Management plans to begin production using 50% of the plant's capacity. The remaining capacity will be allocated to process material from DMET's Lomero project, located 88 km away, accelerating its path to production. A PEA for Lomero is expected shortly.
PR Title: Provides updates on its NICO cobalt-gold-bismuth-copper project in the NWT and Alberta
Analyst Opinion: Positive – NICO hosts the largest primary cobalt deposit in North America, the world’s largest bismuth deposit, and 1.1 Moz gold. FT has secured grants totaling $17M from the U.S. Department of Defense, and the Government of Canada. Recent studies have identified improvements aimed at enhancing gold, bismuth, and cobalt recoveries, while reducing costs, as part of an updated feasibility study. Additionally, FT and Rio Tinto (NYSE: RIO) have confirmed the feasibility of processing materials from Rio Tinto’s Kennecott operations in Utah at FT’s proposed hydrometallurgical facility in Alberta.
PR Title: Results from two more holes of a drill program at Gravel Creek (Nevada)
Analyst Opinion: Positive – The final two holes of WEX’s 2024 drill program returned high-grade intercepts, including 1.53 m of 19.98 g/t AuEq, and 1.13 m of 12 g/t. Overall, the 2024 program has delineated a high-grade, 550 m x 350 m mineralized zone east of the existing resources at Gravel Creek, indicating potential for resource expansion. Gravel Creek, featuring an underground/high-grade gold resource, is part of WEX’s Aura gold-silver project. Aura hosts three deposits (Gravel Creek, Doby George, and Wood Gulch).
