Emmerson Resources Ltd (ASX:ERM) has attracted a Speculative Buy recommendation from Euroz Hartleys and an improved price target of 20 cents per share, up from $0.14, after fielding impressive copper assays from Hermitage.
The company recently soared on hitting 117 metres at 3.38% copper from 75 metres in reverse circulation (RC) drilling at Hermitage Project in the Tennant Creek Mineral Field.
Shares are currently trading at $0.14 after the price trebled to a new 9-year high of 22.2 cents last week.
The key catalysts behind the price upgrade are:
- Assays Hermitage, Edna Beryl (NT) – late Q4CY21/early Q1CY22;
- Drilling Kiola (NSW) – early Q1CY22;
- Follow-up drilling Hermitage/Jasper Hills (NT) – early CY22;
- Resource update Mauretania and Black Snake (NT) – CY22;
- JV partner TCMG 700ktpa CIL plant reassembled (NT) – CY22; and
- Gold and copper price movements.
The following are key points from the Euroz Hartleys report:
Impact
- Hermitage: hole HERC003 reports an impressive 117 metres at 3.38% copper from 75 metres (including 30 metres at 7.26% copper and 2.69 g/t gold from 162 metres and 3 metres at 14.9 g/t gold and 4.24% copper to EOH). True widths unknown at this stage.
- The best (copper-gold) result reported to date from ERM within the Tennant Creek field, and it would appear a high-grade feeder zone has been discovered which could have extensive depth potential.
- Assays pending for gold in native copper zone reported within HERC003, and another hole (HERC004) drilled to the NNW (reports 14 metres of altered ironstone from ~16 4 metres). Follow-up drilling planned upon completion of the northern wet season (March-April 2022).
- The neighbouring prospect Jasper Hills (also 100% ERM) has similar potential to Hermitage but corresponds to a potentially larger target. Access agreement being progressed for drilling in CY22.
- The new Chariot resource 556,000 tonnes at 7.8 g/t gold for 138,800 ounces gold; split between high-grade open pit (41,000 ounces at 17.7 g/t) and underground (97,000 ounces at 6.3 g/t resources, highlights strong potential for a free-carried 6% gold production royalty; which on the current contained ounces equates to un-risked +A$20 million potential.
- ERM’s Small Mines JV partner TCMG has plans to establish processing infrastructure within the Tennant Creek field in CY22.
- We have increased our assigned exploration value and also reassessed our production royalty value, which has increased our ERM valuation to $0.20/share (up from $0.14/share).
Action
Attractive 100%-owned prospects, generating significant results. Also JV exploration ground (funded by earn-in partner) and a growing number of deposits already in an emerging Small Mines JV for gold royalty streams; a sensible self-funding model. Speculative Buy retained, improved Price Target of $0.20/sh (up from $0.14/sh).