Broker values WRM’s Red Mountain Project well above current share price

By Meagan Evans. Published at Sep 4, 2017, in Small Caps

White Rock Minerals Ltd (ASX:WRM) this morning announced that Perth stockbroker DJ Carmichael has initiated coverage on its 100%-owned Red Mountain Zinc Project.

The project is located 100 kilometres south of Fairbanks in central Alaska, USA, and comprises 224 mining claims over a total area of 143 square kilometres. It contains polymetallic VMS mineralisation rich in zinc, silver and lead, and also with significant gold and copper.

DJ Carmichael’s has tagged WRM as a ‘Speculative Buy,’ with a 6 cent per share valuation attributed to the Red Mountain Project alone.

Of course, it should be noted that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns mentioned in this article should not be used as the basis for an investment as they may or may not be replicated.

The broker’s independent valuation comes after the release of an initial JORC 2012-complaint Mineral Resource Estimate (MRE) for the Red Mountain Project in April this year, of 16.7Mt at a zinc equivalent at a grade of 8.9 per cent.

Red mountain mineral resource summary

The Broker notes that the project’s high grade component of 9.1Mt at 12.9% zinc equivalent (using a 3% zinc cut-off grade), places Red Mountain as one of the highest grade and more significant deposits of any zinc company on the ASX.

It says the project’s Resource “immediately places Red Mountain as an important VMS asset within a global context and one that stands as a peer to the more well-known deposits such as Heron’s Woodlawn deposit and Red River Resource’s Thalanga project.”

Yet WRM remains a speculative play and investors should seek professional financial advice if considering this stock for their portfolio.

Using transactional-based and peer analysis-based methodologies, plus the Rule of Thumb check, the broker delivered a valuation for the Red Mountain Project of A$52.9 million.

WRM red mountain project

It sees significant potential to increase the resource base from numerous, untested, high priority exploration targets. Noting, that given the propensity of VMS deposits to occur in clusters, over time, the project’s resource base will grow beyond the current 16.7Mt.

The broker compared the size and tenor of the Red Mountain mineralisation to a range of ASX-listed zinc-dominant polymetallic VMS projects. As you can see below the Red Mountain deposits stand up well against more widely known peer projects that provide the basis for substantial market capitalisations of their owner groups.

Red mountain zinc grade

It also found that the project’s Enterprise Value (EV) is low compared to its peers, with its grade close to being best in class. Here’s a comparison of EV per zinc equivalent with zinc equivalent resource grade for WRM and its peer group.

Red mountain enterprise value

DJ Carmichael’s valuation report is the second independent valuation of the project in recent months. In July 2017, Independent Investment Research (IIR) published its own research report. IIR also valued the Red Mountain zinc-silver project at 6 cents per WRM share, or $52 million, within a range of $30 to $66 million.

With dual independent valuations estimating the Red Mountain Project alone at 6 cents per share, WRM is currently trading at what could be an appealing discount, at just 1.5 cents per share.

And that’s not even attributing any value to WRM’s 100% owned Mt Carrington gold-silver project in northern NSW, which has a Resource Estimate totals of 0.34Moz gold and 23.5Moz silver. An updated PFS for Mt Carrington is scheduled for later this year, which DJ Carmichael’s suggest could “significantly increase the fundamental value of that project”.

Adding to that, the broker has the view that the application of modern exploration techniques and a well-designed and executed drill program in 2018 could add significant value to the Red Mountain project, and in turn, the value of WRM as a whole.

View Our Investment Portfolios



S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why is Australia’s leading small cap publication

Founded seven years ago, is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise. provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more. is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!