eResearch | In this short video, Chris Thompson of eResearch talks about Initiating Coverage on Canadian North Resources Inc. (TSXV:CNRI | FSE:EO0).
You can download our 61-page Equity Research Report that covers an in-depth analysis of the company and a detailed overview of its exploration projects in Nunavut, by clicking on the following link: eR-CdnNorthRes-CNRI-IR-2022-07-25_FINAL
Canadian North Resources Inc. (“CNRI”) is a Canadian-based mineral exploration and development company that explores for minerals in Nunavut, Canada. The Company has acquired a 100% interest in the Ferguson Lake Project, which comprises an area of 253.8 km2 (over 62,715 acres). The project hosts a recently updated NI 43-101 mineral resource containing: an Indicated Mineral Resource of 455 million pounds (Mlb) copper (Cu) at 0.85%, 321 Mlb nickel (Ni) at 0.60%, 37.5 Mlb cobalt (Co) at 0.07%, 1.08 million ounces (Moz) palladium (Pd) at 1.38 grams per tonne (g/t), and 0.18 Moz platinum (Pt) at 0.23 g/t; and an Inferred Mineral Resource containing 947 Mlb Cu at 0.91%, 551.5 Mlb Ni at 0.53%, 62.4 Mlb Co at 0.06%, 2.12 Moz Pd at 1.4 g/t, and 0.38 Moz Pt at 0.25 g/t.
Investment Thesis & Upcoming Catalysts:
- District-scale Project that is Rich in PGMs and Base Metals
- CNRI’s flagship Ferguson Lake Project is a district-scale project with the Company’s 100% ownership of 8 km2 (over 62,715 acres).
- The Company’s main project contains both PGMs, including palladium, platinum, and rhodium, and Base Metals, including copper, nickel, and cobalt. These metals are broadly used in the clean energy and high-tech sectors globally.
- The project hosts a recently updated NI 43-101 mineral resource containing:
- Indicated Mineral Resource: 455 Mlb Cu at 0.85%, 321 Mlb Ni at 0.60%, 37.5 Mlb Co at 0.07%, 1.08 Moz Pd at 1.38 g/t, and 0.18 Moz Pt at 0.23 g/t.
- Inferred Mineral Resource: 947 Mlb Cu at 0.91%, 551.5 Mlb Ni at 0.53%, 62.4 Mlb Co at 0.06%, 2.12 Moz Pd at 1.4 g/t, and 0.38 Moz Pt at 0.25 g/t.
- High Growth and Value Creation Opportunity
- The project is considered to have high growth potential for PGMs and Cu-Ni-Co resources.
- The existing West Zone ore body is open along strike and at depth.
- Only three zones were incorporated into the Updated NI 43-101 resource; seven mineralized zones can be drilled for additional resources.
- There is the potential for new discoveries from existing surface sampling and recently acquired regional prospects.
- Solid Existing Infrastructure and Historical Activity Lowers Start-up Expenses
- CNRI and prior owners have spent approximately $140 million in exploration and metallurgical tests on the Ferguson Lake Project since its discovery in the 1950s, which includes: 158,528m of drilling, a 55-person field camp, an airstrip, various geochemical and geophysical surveys, and metallurgical work.
- Strong Management Team
- CNRI has an experienced team of professionals with a history of successful exploration and an engaged Board of Directors to advance the Ferguson Lake Project.
- Fully Funded for the Short Term
- As of March 31, 2022, CNRI had $17.5 million in cash on its Balance Sheet.
- In addition, the Company has strong shareholder support and has illustrated its ability to raise funds from the capital markets when required.
- Upcoming Catalysts
- Moving the project to the Pre-Feasibility Stage.
- Results from the current diamond drilling exploration program.
- Additional metallurgical tests with current and alternative processing technologies.
Financial Analysis & Valuation:
- We are basing our one-year target price on 5% of the value of an adjusted resource using CNRI’s updated NI 43-101 resource for the Ferguson Lake Project released on June 13, 2022, and 2025 commodity prices.
- Our adjusted resource for the valuation is based on the following formula: 75% of the Measured & Indicated (M&I) and 50% of the Inferred resource.
We Initiated Coverage with a Speculative Buy rating and one-year price target of $5.00
You can download the full 61-page report by clicking here: eR-CdnNorthRes-CNRI-IR-2022-07-25_FINAL
Notes: All numbers in CAD unless otherwise stated. The author of this report, and employees, consultants, and family of eResearch may own stock positions in companies mentioned in this article and may have been paid by a company mentioned in the article or research report. eResearch offers no representations or warranties that any of the information contained in this article is accurate or complete. Articles on eresearch.com are provided for general informational purposes only and do not constitute financial, investment, tax, legal, or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this information should consult with a financial advisor. The article may contain “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements are based on the opinions and assumptions of the Company’s management as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein. Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Please read eResearch’s full disclaimer.
