• Fri. Mar 29th, 2024
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Defense Metals is an Execution Story that is Flying Under the Radar

In early October, we started to cover Defense Metals Corp. (TSXV: DEFN) (OTCQB: DFMTF) (FSE: 35D) and have been impressed with how the story has advanced since then.

Defense Metals Corp. is a mineral exploration and development company that is focused on the acquisition, exploration, and development of mineral deposits. The Canadian junior miner is focused on regions that contain metals and elements which are commonly used in the electric power markets, defense industry, national security sector, and in the production of green energy technologies

The most attractive asset in Defense Metals’ portfolio is the Wicheeda Property which is 100% owned by the company. The property is massive (covers 4,244 hectares) and consists of 9 mineral claims. The Wicheeda property provides Defense Metals with an asset that has significant upside potential and believe our readers should be aware of it.

From releasing favorable assay results to completing an oversubscribed private placements (in a very tough capital raising environment), Defense Metals has been nothing short of an execution story and we believe the opportunity is flying under the radar.

Last week, Defense Metals raised more than $6 million in a private placement and we believe the company has the resources needed to execute on its portfolio of projects. The proceeds will be used for advancing the Wicheeda Rare Earth Element (REE) Project and we find this to be significant since they will qualify as Canadian exploration expenses, which would allow for the business to qualify for the federal 30% tax credit pursuant to the draft legislation released in August.

The remaining proceeds will be used for the Wicheeda Project as well as for general corporate and working capital purposes. We believe this is a strategic use of capital and are favorable on the management team’s ability to maximize the use of the capital raised.

An Execution Story to be Aware of

The last few months have been busy for Defense Metals and have been highlighted by a series of strong assay results. Most recently, the company announced additional Rare Earth Element (REE) assay results from one additional core hole in the Wicheeda REE Deposit. The results come from the deepest hole drilled to date at Wicheeda and we find this to be important when determining the amount of value that can be extracted from the deposit.

As part of the 2022 Wicheeda resource delineation and pit geotechnical program, the company  has drilled more than 5,500 meters in 18 holes. So far, Defense Metals has released assays for a total of 2,867 meters in 8 holes. Over the next few weeks and months, the company is expected to release assay results for the remaining 10 holes and we are bullish on this due to the data that has already been published.

Defense Metals continues to drill yield high-grade REE intercepts in the Wicheeda Deposit and we believe the previously released data helps de-risk the program. With a much stronger balance sheet, the company will be able to continue to drill and we classify Defense Metals as an event-driven catalyst story.

Defense Metals is Trading at a Discount

We consider Defense Metals to be a multi-faceted growth story and find the risk-reward profile to be favorable at current levels. By executing on a series of strategic growth initiatives, the management team has enhanced the company’s growth prospects and we are bullish on the assets it owns.

Based on Defense Metals’ market capitalization, we believe the business has substantial upside potential and find the valuation to be compelling. Although the media loves to talk about how the global economy is in a recession, we believe certain sectors are better positioned than others. With Defense Metals, we are of the opinion that the business is focused on verticals of the energy metals market that have shown continued strength and want our readers to be aware of this. 

If you are interested in learning more about Defense Metals, please send an email to support@onthebids.com with the subject “Defense Metals” to be added to our distribution list.

Company Relationship Disclosure

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This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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