Analysts’ Ideas Of The Week


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  1. Why did Teck Resources (TSX: TECK/MCAP: US$23B)  reject a US$23B bid from Glencore (LSE: GLEN/MCAP: US$72B)?
  2. Our rationale for supporting Liontown Resources’ (ASX: LTR/MCAP: US$3.8B) decision to reject a US$3.7B bid from Albemarle Corporation (NYSE: ALB/MCAP: US$26B).
  3. Why did gold/silver prices trend higher last week?
  4. Shares of a silver junior under coverage were up 35% last week.
  5. Revenue and EPS of a junior gold producer under coverage blow past our expectations.

FRC Top Picks

The following table shows last week’s top five performers among our Top Picks, including five junior resource companies. The top performer Kootenay Silver Inc. (TSXV: KTN), was up 35%, amid higher silver prices. The iShares MSCI Global Silver and Metals Miners ETF (BATS: SLVP) was up 5% last week. Our prior reports can be viewed here.

Top 5   Weekly PerformersWoW Returns
Kootenay Silver Inc. (KTN.V)35.0%
Southern Silver Exploration Corp. (SSV.V)27.8%
Panoro Minerals (PML.V)25.0%
Hot Chili Limited (HHLKF)24.0%
E3 Lithium Limited (ETL.V)20.6%
* Past performance is not indicative of future performance (as of April 03, 2023)

Companies on our Top Picks list are up 12% on average since we initiated coverage vs -29% for the benchmark (TSXV).

AIW Top Picks
Total   Return1 Week1 mo3 mo6 mo1 yr3 yrSince launch
Special Situations (MIC)3.3%-19.7%-13.1%-18.2%-40.7%73.5%-21.5%
Private CompaniesN/AN/AN/AN/A6.3%157.4%7.1%
Portfolio (Total)3.1%-5.0%-4.5%-7.6%-33.0%72.7%12.2%
Benchmark (Total)3.4%-1.8%11.3%3.8%-30.0%56.7%-28.8%
Portfolio (Annualized)-----33.0%20.0%1.2%
Benchmark (Annualized) -----30.0%16.1%-3.6%

1. Since the earliest initiating date of companies in the list of Top Picks (as of April 03, 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.


Last week, global equity markets were up 2.7% on average (up 0.8% in the prior week), amid lower than expected growth in U.S. GDP, and inflation data in Europe, suggesting that central banks will likely pause/slow rate hikes shortly.

Weekly Mining Commentary

current vs pre covid mining chart

Source: FRC/Various

The US$ continued to slide, driving gold/silver prices higher. We remain positive on gold and silver, and believe that lower yields should drive equity valuations higher.

week over week graph
year over year graph
lme chart
shfe chart

Valuations of gold producers were up 0.5% last week (up 3% in the prior week); base metal producers were up 5% last week (up 3% in the prior week).

gold producers
base metals
 Gold ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
3Polyus n/an/an/an/a
4Agnico Eagle3.988.413.918.32
5AngloGold 2.285.662.486.20
6Kinross Gold 2.015.372.135.65
7Gold Fields2.875.912.845.72
13Eldorado Gold1.955.162.045.40
 Average (excl outliers)2.746.202.746.26
 Base Metal ProducersEV / R   (forward)EV / EBITDA (forward)EV / R (forward)EV / EBITDA (forward)
1BHP Group 2.875.243.115.66
2Rio Tinto2.214.762.304.94
5Anglo American1.403.751.473.93
6Teck Resources2.104.492.144.59
7First Quantum2.957.233.117.53
 Average (excl outliers)1.914.832.015.03

We are maintaining our metal price forecasts.  

FRC Forecasts
Current Price2023E Long-Term (2025+)
Gold (US$/oz)$1,990$1,825$1,400
Silver (US$/oz)$24.01$22.00$18.00
Copper (US$/lb)$4.05$3.50$3.00
Zinc (US$/lb)$1.32$1.25$1.10
Nickel (US$/lb)$10.47$10.00$8.00
Source: FRC

Source: FRC

Key sector developments are listed below (positive):

 – Copper-zinc miner Teck Resources has  rejected a US$23B bid from Glencore. Glencore’s offer reflects an EV/R of 2.1x, and an EV/EBITDA of 4.6x, which we note are in line with sector averages. We believe Teck might have entertained the offer if Glencore had offered a premium. Teck has stated that the offer is opportunistic, and added that the deal exposes its investors to geopolitical risks (due to Glencore’s presence in the DRC), and fossil fuels, such as coal and oil.

 – Australian lithium company Liontown Resources has rejected a US$3.7B bid from Albemarle Corporation to acquire all of the outstanding shares of LTR. LTR is aiming to commence lithium production next year. As the AT-NPV8% of LTR’s flagship asset is US$4.2B (per a feasibility study completed in 2021), we are supporting LTR’s decision to reject the offer. As mentioned in the past, we are expecting a surge in M&A activities in the EV metals space this year.

 – The Canadian government has introduced a 30% tax credit for investments in equipment for mining and processing critical minerals.

Updates from Resource Companies Under Coverage

Steppe Gold Ltd. / TSX: STGO

PR Title

Announces 2022 financial results

FRC Opinion

Positive – 2022 revenue was up 159% YoY (beating our estimate by 22%), due to increased production. EPS turned positive (-$0.32 to $0.23), beating our estimate by 118%.  We will publish an update report shortly.

Lithium Chile Inc. /TSXV: LITH

PR Title

Completes three additional holes on Salar de Arizaro (Argentina)

FRC Opinion

Positive – LITH continues to encounter brine-bearing formations at shallow depths, implying resource expansion potential. We are expecting an updated resource estimate shortly.  

Monument Mining Limited / TSXV: MMY

PR Title

Commences mining high-grade sulfide ore at Selensing gold mine

FRC Opinion

Positive – We are expecting production to double in the next 12 months. As MMY is targeting higher-grade ore, we are expecting OPEX to decline as well.

Loncor Gold Inc./ TSX: LN

PR Title

Announces a $1.6M private placement

FRC Opinion

Positive – Proceeds will be used to fund working capital. Management is in discussions with potential financing/strategic partners. LN’s projects are 220 km from Barrick’s (TSX: ABX) Kibali mine – one of the largest gold mines in Africa.

Southern Silver Exploration Corp./ TSXV: SSV

PR Title

Reports 9.1 m of 0.92% CuEq (0.59% Cu, 3 g.t Au, 0.01% Mo, and 2.3 g/t Ag) in a hole testing Skarn/CRD mineralization at the Oro project, New Mexico

FRC Opinion

Positive – Encouraging results; holes targeting two geophysical anomalies identified breccia pipes with potential for hosting relatively high-grade copper.

Verde Agritech Plc/ TSX: NPK

PR Title

Announces 2022 financial results

FRC Opinion

Negative – 2022 EPS was up 396% YoY (due to higher product sales and prices), but 21% lower than our forecast, due to lower product sales, and higher product delivery freight expenses. We will publish an update report shortly.

Financial / Technoloy / Energy / Special Situations 

ESE Entertainment Inc./ TSXV: ESE

PR Title

Announces Q1-2023 (ended January 2023) financial results

FRC Opinion

Positive – Revenue was up 73% (driven by acquisitions), and EPS (adjusted) improved YoY (-$0.02 to -$0.00). Net losses were 20% lower than expected. We will publish an update report shortly.

Weekly Crypto Commentary

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

April 3, 2023
Binance Coin27%0%-31%

Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$1.19T, up 17% MoM, but down 45% YoY.

total crypto cap

Source: Coinmarketcap

Companies operating in the crypto space are trading at an average EV/R of 5.4x (previously 5.2x).

EV/R of Crypto Companies

ev r crypto

Source: S&P Capital IQ/FRC

April 3, 2023
Crypto CompaniesTickerTEV/Revenue
Banxa HoldingsTSXV: BNXA0.6
BIGG DigitalCSE: BIGG8.0
Canaan Inc. NASDAQ: CAN0.5
Coinbase GlobalNASDAQ: COIN4.7
Galaxy Digital HoldingsTSX: GLXYN/A
Hive Blockchain TechnologiesTSXV:HIVE2.2
Marathon Digital HoldingsNASDAQ: MARA18.2
Hut 8 Mining Corp. TSX: HUT3.7
Riot BlockchainNASDAQ: RIOT5.6

Source: S&P Capital IQ/FRC

Key sector developments are listed below (negative):

 – Global crypto exchange Bitstamp is winding down its operations in Canada, due to increased regulations/restrictions

 – The Financial Services Agency (FSA) of Japan has issued a warning to four crypto exchanges (Binance, Bybit, MEXC Global, and Bitget), stating that these exchanges are operating without proper registrations.

Weekly Cannabis Commentary


Cannabis Industry Performance

April 3, 2023
U.S. CompaniesYTD1-Week1-Year
Cresco Labs Inc. -17%-2%-75%
Curaleaf Holdings Inc. -36%-7%-61%
Green Thumb Industries Inc.-15%-7%-61%
Trulieve Cannabis Corp.-29%-7%-74%
Canadian CompaniesYTD1-Week1-Year
Aurora Cannabis Inc.-28%-6%-83%
Canopy Growth Corp.-28%-12%-77%
Cronos Group Inc.-23%-3%-47%
HEXO Corp.25%-3%-84%
Organigram Holdings Inc.-22%0%-60%
Tilray Inc.-8%-5%-64%
Canadian Average-14%-5%-69%
U.S. Average-24%-6%-68%

Source: FRC/Yahoo Finance

Last week, Canadian cannabis stocks outperformed their U.S. peers (-5% vs -6%). Canadian stocks had outperformed in the week prior to last as well.

Key sector developments are listed below (positive):

– Cannabis companies in Alberta are now allowed to offer sample products for marketing purposes.

– A bill for potentially legalizing recreational cannabis has been introduced in North Carolina.

– The U.S. National Basketball Association will start allowing players to invest in and promote cannabis companies.


Canadian cannabis stocks are trading at a 6% premium (unchanged) relative to their U.S. peers.

March 27, 2023April 03, 2023
Canadian CompaniesTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Aurora Cannabis Inc.TSX: ACB1.6NM1.5NM
Canopy Growth Corp.TSX: WEED4.2NM4.0NM
Cronos Group Inc.TSX: CRON0.0NM0.0NM
Organigram Holdings Inc.TSX: OGI1.
Tilray Inc.NASDAQ: TLRY3.0NM2.9NM
U.S. CompaniesTickerTEV/RevenueTEV/EBITDATEV/RevenueTEV/EBITDA
Cresco Labs Inc. OTC: CRLBF1.
Curaleaf Holdings Inc. OTC: CURLF2.310.52.210.2
Green Thumb Industries Inc.OTC: GTBIF2.
Trulieve Cannabis Corp.OTC TCNNF1.
Implied   Premium (Canada vs U.S.) (Average)6%6%

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 3,511 retail cannabis stores in Canada, an increase of 22 stores WoW (all in ON).

                                                                                     Nationwide Store Count

store count

Source: Provincial Websites, FRC

Geographic RegionStore CountStore CountStore CountStore CountPopulationPopulation / Store
Alberta 755 758 756 756 4,428,247 5,857
B.C. 428 429 485 485 5,120,184 10,557
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 1,499 1,501 1,705 1,727 14,745,040 8,538
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 3,164 3,170 3,489 3,511 37,971,020 10,815

Source: Provincial Websites, FRC

Psychedelic Industry Performance

Psychedelic Industry Performance

Psychedelic stocks were up 7% on average last week (up 7% in the previous week as well).

April 3, 2023
Atai Life Sciences N.V.-29%38%-64%
COMPASS Pathways plc24%-5%-30%
Cybin Inc.-9%1%-57%
Delic Holdings Corp.-88%-9%-89%
GH Research-17%6%-59%
Mind Medicine Inc.2%5%-82%
Numinus Wellness Inc.-5%14%-67%
Seelos Therapeutics Inc.6%6%-22%

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.

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Companies Mentioned:

Kootenay Silver Inc. (KTN.V), Southern Silver Exploration Corp. (SSV.V), Panoro Minerals (PML.V), Hot Chili Limited (HHLKF), E3 Lithium Limited (ETL.V), Steppe Gold Ltd. / TSX: STGO, Lithium Chile Inc. /TSXV: LITH, Monument Mining Limited / TSXV: MMY, Loncor Gold Inc./ TSX: LN, Southern Silver Exploration Corp./ TSXV: SSV, Verde Agritech Plc/ TSX: NPK, ESE Entertainment Inc./ TSXV: ESE.