$EMO - Research note from Clarus ..Research note from Clarus “”””Encouraging step-out drilling; Accelerating exploration program with 3 additional rigs Emerita is in the process of contracting 3 additional DD rigs that are expected to be mobilized at the IBW project in the next two weeks. This will bring the total rig count to 5, significantly accelerating the planned drill program. Initially the rigs will be deployed at Infanta. Once the IBW permits are granted (in the coming weeks), two rigs will be moved to commence the drill program at Romanera. Management also announced additional vertical step out drilling results from 3 holes (#17, 21 & 23) at Infanta that are demonstrating strong depth potential: As we discussed in our last note, the mineralization is vertically faulted. This has resulted in two zones – South Block (starts at surface and down to ~150 m depth) and North Block that starts at 50 – 100 m from surface and likely continues much deeper (>400 m depth based on TEM survey). The three step out holes are indicating continuity of mineralization at depth (~70 – 100 m deep) over a 300 m strike length. Both the South Block & North Block continue along strike to the west and east. One of the strongest TEM conductors extend 300 m west of historic resource boundary while mineralization also continues 400 m east where a small historical mininig excavation is located. Significant intercepts included Hole #17: 11.3 m at 10.2% ZnEq, incl. 2.1 m at 30.2% ZnEq from ~100 m depth – North Block; Hole #23: 5.1 m at 20.7% ZnEq from ~75 m depth – North Block; Hole #21: 5.5 m at 12.4% ZnEq from ~150 m depth – South Block. Deeper intercepts from the South Block are relatively lower grade, closer to the fault. Management believes this is likely due to the structural effects of the fault that resulted in less massive and more stringer & semi-massive mineralization around the fault. The depth extent and lateral continuity of the North Block mineralization is currently being tested by holes #24 (at depth), #25 & #27 to the east. The western strike and depth extension will be tested post the hunting season ending November 15. Geophysical survey (TEM) is also expected to re-commence after November 15 post the hunting season.
Catalysts Aznalcollar resolution – year end 2021 (Clarus expectation); Drill results from drill program at La Infanta – ongoing; Environmental approval (AAU) for drilling at Romanera & El Cura – imminent; Commencement of drilling at Romanera (~10,000 m) & El Cura (~7,000 m) – H2/21; IBW Resource Update – Q1/22.
Conclusion: We are encouraged by the initial results from deeper drilling at Infanta that are demonstrating depth potential while also helping improve management’s understanding of the structural controls for better drill targeting. We believe the North Block mineralization will likely expand both along strike (currently ~300 m) as well as to depth well beyond the ~100 m tested to date, as suggested by the TEM surveys indicating conductors beyond 400 m depth”””