Analysts' Ideas of the Week
Promising Updates from a Lithium M&A Target and a Junior Advancing Its Second Mine to Production
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
We review the performance of our Top Picks, including a gold junior, whose shares rose 28% last week. Additionally, we highlight a promising resource update from Lake Resources’ lithium project near Ganfeng’s new lithium mine in Argentina, Denarius Metals’ critical permit in Spain, and encouraging updates from other companies under coverage
- 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
Lake Resources NL
PR Title: Announces an updated resource estimate on its Kachi lithium brine project in Argentina
Analyst Opinion: Positive – Kachi, located near Ganfeng Lithium’s (SZSE: 002460) recently commissioned Mariana lithium project, hosts a large-tonnage, low-grade lithium brine resource. Resources increased by 4% to 11.1 Mt of lithium carbonate equivalent (LCE). M&I resources now account for 74% of the total (previously 69%), indicating increased confidence in the resource. The weighted average grade remained relatively flat at approximately 216 mg/L. A 2023 Definitive Feasibility Study confirmed that Kachi can produce battery-grade lithium carbonate (>99.5% purity) on-site without additional refining or processing. Management is actively seeking a strategic partner to advance the project towards production. The lithium sector is currently out of favor, but we anticipate a rebound within the next 12 months as the market moves toward a projected supply deficit in 2026. Lithium prices are down 40% YoY to US$9k/t vs the 10-year average of US$19k/t. We believe current lithium prices are unsustainable, and below the break-even level for most large-scale development projects. Given Kachi’s size, we believe LKE is an attractive M&A target for larger players.
Denarius Metals Corp.
PR Title: Announces receipt of water permits for its Aquablanca project (Spain)
Analyst Opinion: Positive – This is a major milestone for DMET, as the permit allows the company to begin de-watering the underground mine, potentially enabling a restart of operations at the Aguablanca polymetallic project within the next 12 months. DMET owns a 21% interest, and is the operator of the project. The company recently brought its first mine, the Zancudo gold project in Colombia, into production. A PEA on its Lomero project is expected imminently.
Cupani Metals Corp.
PR Title: Announces a $4M private placement
Analyst Opinion: Positive – This financing follows the receipt of drilling permits for its Blue Lake copper-nickel-platinum-palladium project in Quebec. Based on our review of available data, and speculative assumptions, we estimate the project could host over 3 Blbs of CuEq. Check out a recent webinar with Cupani's management, featuring a Q&A session moderated by our Head of Research. https://www.youtube.com/watch?v=LoOMS67Q6QE&t=2796s
Golden Arrow Resources Corporation
PR Title: Identifies new exploration targets at the San Pietro copper-gold project (Chile)
Analyst Opinion: Positive – Samples from two newly identified targets returned encouraging grades, including 1.4 m of 3.41% Cu and 0.26 g/t Au, and 3.0 m of 2.08% Cu and 4.19 g/t Au. GRG has also expanded the project’s land package. The project hosts a substantial inferred resource of 4.4 Blbs CuEq at 0.41%, and is strategically located between three copper assets operated by Capstone Copper (TSX: CS), including an active open-pit mine.
