Europa Metals has made real progress at Toral in Spain since a PEA in 2020 and is significantly undervalued compared to its peers, according to house broker WH Ireland.
Toral is one of Europe’s most under-appreciated lead-zinc deposits, suggests WHI, with a real prospect of becoming a mine.
“The successful demonstration of ore-sorting introduces potentially huge economic upside and optionality in mine configuration,” the broker adds.
Ore sorting might facilitate smaller volumes of higher-grade ore being fed into a smaller recovery circuit than considered in the PEA.
Alternatively, there is scope to maintain the scale of the processing plant and expand mine operations to recover lower-grade mineralisation.
In addition, the farm-out agreement with Denarius reduces Europa’s interest in Toral and provides for funds to take it through a definitive study with shareholders retaining a meaningful 20% stake in any upside,
Fair value is estimated at 11.7p/sh by WHI, compared to 3.05p at the last close.