Toronto stockbroker Red Cloud Securities likes EnviroGold Global’s switch to seeking royalties on revenues generated through the application of its mine tailings process technology.
Red Cloud said in a note the avoidance of capital commitments for waste processing facilities would enable the Canadian microcap to “pursue a capital-light growth strategy” while focusing on research and development using its IP portfolio of 22 patents and designs.
“We await more details about the business model and clarity on licensing agreement terms before updating our valuation,” the broker said.
EnviroGold, which has a current circa-C$30 million market value, is targeting billions of dollars worth of recoverable metals in mine and smelter waste at brownfield sites with its leaching technology.
On basic modelling, Red Cloud says EnviroGold’s technology should help companies meet ESG goals by reducing waste generation and reclamation liability while generating positive after-tax returns.
“Test results from current tailings reprocessing agreements possess demonstrational value EnviroGold is currently working with five major global metal production companies to test its technology for the recovery of precious, base and critical metals from waste streams,” the broker says.
“Initial test results from one of these agreements yielded positive nickel-copper-cobalt-PGM recoveries from a flotation concentrates.
“Initial results from tests for other companies are expected in Q1/2024.
“In our opinion, these test results should continue to demonstrate the capabilities of the proprietary technology and support the new royalty business model.”
