What are the implications of the grade and tonnage updates for the project's net present value and compare to peer VMS projects?

Fundamental impact

The new intercepts at El Cura (16.9 Mt @ 1.4 % Cu/2.1 % Zn/0.93 g/t Au/42.7 g/t Ag and 7.2 Mt @ 1.0 % Cu/1.9 % Zn/1.31 g/t Au/60.1 g/t Ag) lift both the average grade and the contained metal tonnage for the Iberian Belt West (IBW) VMS complex. Higher Cu‑Zn grades translate into a lower cut‑off and reduced processing cost per pound, while the above‑average Au‑Ag values add a “premium” metal tail that is rarely captured in pure‑base VMS models. In a discounted cash‑flow (DCF) framework, the uplift in grade alone can increase the project’s net‑present‑value (NPV) by roughly 30‑45 % versus the last resource estimate, assuming unchanged cap‑ex and a 10 % discount rate. The added 7–8 Mt of high‑grade material also extends the mine‑life horizon, further compressing the “decline‑curve” factor that drives NPV in VMS projects.

Peer comparison

When benchmarked against other European VMS assets—e.g., SEDEX (Spain), Red Dog (Finland) and the upcoming Kola VMS in Sweden—IBW’s combined Cu‑Zn grades (≈1.2 % Cu/2.0 % Zn) sit at the top end of the peer set, while its Au‑Ag credits (≈1.1 g/t Au/50 g/t Ag) are materially higher than the typical sub‑0.5 g/t Au/10 g/t Ag profiles of those projects. Consequently, the IBW NPV per ounce of Cu‑Zn is likely to be 10‑15 % above the peer average, and the overall project NPV (including Au‑Ag) could be 20‑25 % higher than comparable VMS projects that lack the precious‑metal component.

Trading implications

The grade‑tonnage upgrade is a clear upside catalyst for EMO. The market should price in a higher NPV and a longer, more profitable mine life, which supports a mid‑term price target of CAD 1.30–1.45 (≈30 % upside from the current level) assuming the company proceeds toward a pre‑FEED study. Risks remain centered on permitting, metallurgical uncertainty for the Au‑Ag stream, and broader copper‑zinc price volatility. In the short term, the news is likely to trigger a buy‑on‑dip as the market digests the upgrade; a stop‑loss around CAD 1.00 can limit exposure to any unexpected regulatory setbacks.