Analysts at Stifel GMP have reiterated their ‘Speculative Buy’ rating for Patriot Battery Metals after the company posted positive results from its winter 2023 drill program at its Corvette lithium property in the James Bay region of Quebec.
“Today's results include some exceptional high-grade intercepts over very wide widths, showcasing the deposit's amenability to a future low-cost open pit development scenario,” the analysts wrote in a note to clients.
Highlights included 1.89% lithium oxide (Li2O) over 122.6 metres (m), including 5.01% Li2O over 8.1m, and 1.56% Li2O over 130.3m, including 2.45% Li2O over 52.7m.
“The location of several of the high-grade intercepts has led the company to a new interpretation of the high-grade Nova Zone, now extended to 1.1 kilometres in length,” the analysts wrote.
Stifel’s analysts pointed out that assays were still pending for 27 holes drilled during the program, with all drilling to be incorporated into a maiden resource estimate expected in July 2023.
“Exploration will continue at Corvette as part of the summer-fall drill program, scheduled to re-commence in late May. Drilling will focus on the CV5 and CV13 pegmatite clusters,” they noted.
As such, the analysts repeated their C$16 price target for Patriot stock. The company’s shares are currently trading at C$15.70.
“Our valuation is based on the combination of a discounted cash flow model for the CV5 cluster at Corvette and an in-situ valuation multiple for the CV13 cluster,” they explained.
“We are using a 12% discount rate for CV5, with an assumed start to production in 2030. For CV13 we use a $400 per ton valuation multiple on an estimated 400 kilo-ton lithium carbon equivalent (LCE) resource.”
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