Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCMKTS; LLJ:FSE) was a darling among TSX Venture Exchange investors in 2021, with its share price skyrocketing 1,255% in less than a calendar year to an intraday high of CA$4.22 on Nov. 1, up from $0.22 in early March.
The outstanding performance was recently honored for being one of the top 10 performing mining stocks on Canada’s junior board last year.
“We are very proud of this accomplishment and very grateful to our many supportive shareholders…this performance represents an effort by all of our staff,” said Emerita CEO and Director David Gower.
The turning point for Emerita happened in June when the Supreme Court of Spain awarded the company undisputed ownership of three polymetallic deposits: La Infanta, Romanera, and El Cura, which make up Emerita’s 100%-owned Iberian West Project.
The three deposits are in the prolific Iberian Pyrite Belt, which is about 40 kilometers (km) wide and stretches roughly 160 km across southern Spain’s Andalusia region into Portugal.
Silver was first mined in this belt in about 600 BC, and more than 20 companies listed on just about every bourse worth its salt are currently exploring it for economic polymetallic deposits.
Emerita management expects to soon have the necessary permits to drill Romanera and El Cura. Once the permits are in hand, likely in Q2, eight drills will test the deposits. Those drill results will be used to build a resource estimate and, eventually, support a feasibility study.
“We are forecasting 2022 to be another transformational year for the next phase of our growth with commencement of drilling the Romanera and El Cura deposits expected in the next few weeks and the resolution of the Aznalcollar legal dispute near conclusion,” said Gower in a release.
La Infanta, Romanera, and El Cura have all been drilled previously, with Rio Tinto Plc (RIO:NYSE) subsidiary Minera Rio Tinto last sinking holes into the land package in the 1990s. Historical drilling data suggest the mineralization in these deposits remains open along strike and at depth.
A drill program on La Infanta by Emerita in the second half of 2021 verified many of the historical drill results and will allow Emerita to start building a three-dimensional model of the high-grade deposit.
Infill drill hole IN018 on La Infanta intersected 8.2 meters grading 2.5% copper, 8.7% lead, 17.3% zinc, and 223.5 grams per tonne silver (223.5 g/t silver) and 0.5 g/t gold from 59.4 meters. IN018 was a 40-meter step out to the west of the historical limits of the deposit.
Emerita says a ground geophysical survey indicates that a strong electro-magnetic conductor extends at least 300 meters west of IN018, so it’s likely the deposit extends in that direction.
Meanwhile, Infill holes IN014, IN015, IN016 all intersected high-grade mineralization. The highlight was drill hole IN014 intersected 5.7 meters grading 2.4% copper, 7.3% lead, 13.4% zinc, 225 g/t silver, and 0.6 g/t gold from 84.7 meters down hole.
Emerita has been waging a legal battle for Aznalcollar for seven years.
Aznalcollar is also in the prolific Iberian Pyrite Belt. It’s better known as Los Frailes, a high-grade zinc-lead-copper-silver volcanogenic-massive-sulphide deposit (these tend to be the geological settings for mammoth base metals deposits) that was mined by open pit methods.
Los Frailes suffered a tailings dam failure in 1998, and low base metals prices later put it into care and maintenance. Since then, some reclamation work has been done, and the region remains mining friendly.
The historical open-pit mineral resource at Los Frailes, as calculated by the previous operator of the mine, was estimated at 71 million tonnes grading 3.86% zinc, 2.18% lead, 0.34% copper, and 60 parts per million silver — one of the world’s largest deposits of its kind.
Emerita completed engineering, environmental, and water management studies as part of the public tender process to get Aznalcollar. The public tender was approved by all levels of government as part of an overall effort to put the mine back into production. Permitting should be all but a foregone conclusion.
Zinc, copper, and silver prices are expected to remain robust in the face of growing inflation, and infrastructure spending by governments will have a major impact on zinc consumption (especially if the U.S. Build Back Better bill gets off the ground).
Zinc is mainly used to galvanize steel, which makes steel less prone to rust. It’s also being used to build better energy storage systems because it’s cheaper than lithium and almost as efficient.
As of late November, famed mining investor Eric Sprott either owned or controlled about 10.7% of Emerita — or more than 20 million shares.
He exercised some warrants late in 2021, and, along with a bought-deal financing in July (18,182,500 units at CA$1.10 apiece), Emerita now has more than $25M in the kitty — enough to fund all its exploration work in 2022.
Emerita’s corporate office and technical team are based in Seville, while most of the administration work is done from an office in Toronto.
Shares in Emerita Resources closed at CA$2.27 on March 1, with 765,000 shares changing hands. The company has a market cap of $445M.
Disclosures
1) Brian Sylvester compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None
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