$EMO - Clarus Report - Target $5Emerita Resources Corp. EMO-TSX.V: $2.84 Rating: Speculative Buy Target: $5.00
La Infanta Footprint Expanding; Catalyst-Heavy 2022 to Drive Outperformance Emerita reported additional drill results from La Infanta, including the much awaited step-out results along-strike to both the west and east. Drilling has successfully expanded the mineralization ~200 m to the east while expansion to the west needs to be re-tested in shorter step-outs in order to properly track the mineralization horizon. We believe the expansion to the west remains well intact based on the geophysics that suggests one of the area’s strongest anomalies that lies 300 m to the west of historic resources. Overall, drilling to date is solidifying our conservative estimate of 2.5Mt at La Infanta, while we continue to see 7.0 – 8.0 Mt potential with successful step-outs. In addition, the geophysics is demonstrating potential to significantly expand La Infanta footprint in parallel trends to the north as well as to the east. This could drive overall resource potential well beyond the 7.0 – 8.0 Mt expectation. Big Picture – Emerita has a lot ‘BIGGER FISH TO FRY’ in 2022, including the resolution of Aznalcollar deposit that could be in Q1/22, drilling at the large Romanera deposit, Infanta, El Cura & likely at the Nuevo Tintillo property. In the near-term, we believe investors should be focusing on the commencement of drilling at Romanera (~late-Q1) that has a large historic resource of 34 Mt, incl. 11.2 Mt at 11.9% ZnEq in high grade subset. The high-grade intercepts at depth (incl. 20 m at 13.4% ZnEq from 300 – 350 m depth) imply potential to swiftly grow tonnage, with every 100 m vertical extension adding 2.0 – 4.0 Mt. Geophysics suggests potential to double the historic strike length to +1 km, indicating Romanera could eventually be a very large underground +40Mt deposit at ~12% ZnEq (vs our conservative est. 18Mt at ~12% ZnEq). Overall, we continue to see significant resource expansion potential at IBW that could drive the overall resource growth well beyond our current ‘Base Case’ estimate. We see a number of re-rating catalysts in 2022, including resolution of Aznalcollar, drilling at IBW’s known deposits as well as exploration targets, and exploration at Nuevo Tintillo. SOME EXCITING RESULTS FROM LA INFANTA · EMO announced assays from 11 DD holes at Infanta from the 2021 program. While step-out drilling to the west did not show exciting high grades that we are used to seeing from this deposit, there were some other super high-grade intercepts that continue to confirm the potential of this deposit as an ultra-high-grade underground mine. · Hole #27: Intersected the North Block, returning 1.7 m at 45% ZnEq (with 433 g/t Ag) from 144.2 m down hole as part of a wider intercept of 4.4 m at 19.8% ZnEq (with 181.8 g/t Ag). This hole is a down-dip extension to a depth of ~125 m and below previously reported Hole #21 that returned 7.2 m at 7.9% ZnEq from ~50 m depth (Nov. 12, 2021). · Hole #19: This was essentially an infill hole in South Block returning 1.4 m at 34.7% ZnEq (with 1.5% Cu & 123 g/t Ag) from 79 m down hole.
January 31, 2022 Research @ Clarus Securities Inc.