Alien Metals Limited (LON:UFO) earn-in agreement over the Donovan 2 copper-gold project in Mexico will help accelerate the project’s exploration and development, according to investment research house First Equity.
The objective is to discover and prove up a large economic VMS style deposit, similar to Teck Resources’ San Nicolas Project, located just 15 miles away, First Equity added.
TSX-listed Capstone Mining Corp can earn up to an 80% interest in Donovan 2 by spending around US$10m to PFS over various staged payments and expenditure commitments.
“Today’s announcement demonstrates the management’s ability on delivering by securing a JV partner,” First Equity said in a note.
“Alien has its current exploration plans funded through to 2021, with cash being added to balance sheet from warrant exercises.
“We are encouraged by the success many Pilbara focused explorers are having recently and resultant share price appreciation of those companies.
“With Alien Metals only at start of its exploration journey in this part of the world and seeking similar high-target discoveries, we believe much further upside remains,” said First Equity, which as a buy rating.
Shares dropped 18% today to 1.63p having surged 1,000% over the past few months.