In late June, Emerita Resources Corp. announced to be the winning bidder of a public tender for the Paymogo mining rights in the Huelva Province of south-western Spain. That was the starting shot for its share price to rise sharply from less than 10 cents to now 34 cents in Canada. With a current market capitalization of $29 million, investors are betting that the Paymogo Project offers potential to become a company-maker.
Most of the time, acquiring a high-grade and large-scale mine development project in a logistically favorable and mining-friendly jurisdiction is a highly expensive venture in terms of cash and/or equity payments to the vendors.
Emerita “acquired“ the Paymogo Project through a public tender process from the provincial government with no cash or equity payments, and no underlying royalties. Winning a tender for such a compelling development project is a rare event in the mining space, especially for juniors.
Paymogo is a historically high-grade, large-scale polymetallic project in a well-established mining camp with exceptional near-mine and regional infrastructure. With compelling grade, scale and scalability potential, Paymogo offers an immediate, near- and medium-term opportunity for value accretion.
With today‘s news of having received the final resolution documents from the Mining Department in Huelva, formally awarding Paymogo‘s public tender and its mineral rights to Emerita, the company can now ramp up exploration activity to develop Paymogo towards a production decision.
Adjacent to the border of Portugal, and approximately 70 km west of Seville and 50 km from the port city of Huelva, Paymogo is hosted within the renowned Iberian Pyrite Belt, one of the most highly mineralized and most productive VMS (volcanogenic massive sulfide) terranes in the world.
The Paymogo Project consists of 2 historically high-grade polymetallic VMS deposits: Romanera and La Infanta, both of which occur near surface and remain open for expansion by further drilling.
The larger Romanera Deposit was drilled primarily by Minera Rio Tinto in the 1990s and, according to Emerita, “is reported to contain 34 million tonnes grading 0.42% copper, 2.20% lead, 2.3% zinc 44.4 g/t silver and 0.8 g/t gold within which there is a higher grade resource of 11.21 million tonnes grading 0.40% copper, 2.47% lead, 5.50% zinc, 64.0 g/t silver and 1.0 g/t gold (The Volcanic Hosted Massive Sulphide Deposits of the Iberian Pyrite Belt, Garcia-Cortes ed., 2011).“
Historical drilling at Infanta took place primarily in the late 1970s and early 1980s by Asturiana de Zinc and Phelps Dodge, and showed high-grade copper, lead and zinc intercepts, with strong enrichment in silver and locally in gold. Drilling extended from near surface, where the deposit outcrops, to a depth of only approximately 130 meters and along strike for approximately 600 meters. The deposit remains open at depth and along strike. At the time of historical drilling at Infanta, the strike and down dip extent were not adequately tested. Mineralization extended beyond the property boundary onto ground controlled by a competitor. The Project area has expanded significantly such that the potential extensions of the deposit occur well within Emerita’s project area.
Emerita‘s President, Joaquin Merino (P.Geo.) noted in today‘s news-release: “It is rare to find a deposit with excellent grades this close to surface that has not been closed off by drilling.“
Emerita‘s CEO, David Gower, added: ”We are prepared to mobilize a drill and commence the drill program as soon as the permitting is completed. The initial program will be designed to drill the deposit in sufficient detail to complete a NI 43-101 compliant mineral resource estimate.”
The company today also released 41 historical drill holes from the high-grade Infanta Deposit, with management now being ”very excited to be planning the upcoming drill program for Infanta“.
Emerita has completed the digital compilation of the historical hard copy data for the Infanta Deposit, including for assay data, drill hole surveys, and geological coding which will be required to develop 3D models. Similar compilation activities are ongoing for the larger Romanera Deposit located on the west side of the Paymogo Project.
Many investors love large tonnage porphyry copper-gold development projects in safe mining jurisdictions, typically with grades well below 0.4% copper and 1 g/t gold. With the Paymogo polymetallic VMS deposit, investors are offered much more, a potentially large-scale and high-grade development-stage project historically rich in copper and gold as well as zinc, lead and silver.
Backed by decades of experience in developing polymetallic deposits, Emerita‘s management and technical team is led by its President, Spain-based Joaquin Merino, targeting to become a dominant player in Spain by developing best-in-class VMS projects, comparable to some of the largest and most attractive polymetallic operations globally.
Upon successful completion of legal processes for the near-by Aznalcollar Project in Andalucia, Emerita hopes to get awarded another major, historically rich zinc-lead-silver project at development-stage. Aznalcollar is a past producing zinc-lead-silver open-pit operating in the 1990s for only about 18 months and was closed due to a combination of low metal prices and a severe tailings failure. The government subsequently rehabilitated the site and, due to the demands of the community for employment, initiated a public tender to re-develop the mine – the tender was unanimously supported by all political parties. Emerita believes to be the only qualified bidder, awaiting favorable ruling by the courts.
“Following a 5 year title dispute EMO has received a positive resolution on the high grade Paymogo Project and expects a similar outcome for the Aznalcollar Deposit. Both are world class resources in an area with a strong mining culture, with exceptional mining infrastructure. Aznalcollar is a past producing operation. Companies with comparable assets to Paymogo but located in more logistically challenging operating jurisdictions have capitalizations that significantly exceed that of EMO presently. EMO will hold two top development stage zinc copper projects that are not presently owned by major producers upon successful completion of legal processes.” (Source: Emerita Resources’ Corporate Presentation Q3 2020)
Shares Issued & Outstanding: 84,794,018
Canadian Symbol (TSX.V): EMOCurrent Price: $0.34 CAD (09/08/2020)Market Capitalization: $29 Million CAD
German Symbol / WKN (Frankfurt): LLJA / A2PKVQCurrent Price: €0.208 EUR (09/08/2020)Market Capitalization: €18 Million EUR
Disclaimer: This report contains forward-looking information or forward-looking statements (collectively "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "potentially" and similar expressions, or are those, which, by their nature, refer to future events. Rockstone Research, Emerita Resources Corp. and Zimtu Capital Corp. caution investors that any forward-looking information provided herein is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors. The reader is referred to Emerita Resources Corp.´s public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through its profile on SEDAR at www.sedar.com. Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist. The author, Stephan Bogner, does not hold any equity position in Emerita Resources Corp.,however he hold equity in Zimtu Capital Corp., and is being paid by Zimtu Capital Corp. for the preparation, publication and distribution of this report, whereas Zimtu Capital Corp. holds a long position in Emerita Resources Corp. Note that Emerita Resources Corp. pays Zimtu Capital Corp. to provide this report and other investor awareness services. Emerita Resources Corp. may have one or more common directors with Zimtu Capital Corp. The cover picture has been obtained and licenced from Alberto Masnovo.