Spanish Court Decisions 'Appear to Favor' Canadian Explorer in Tender Process
Research Report

In a June 24 research note, Research Capital Corp. analyst Adam Schatzker reported that previous decisions in the Spanish courts related to the tender process for the Aznalcóllar project, still pending, bode well for Emerita Resources Corp. (EMO:TSX.V; EMOTF:OTCMKTS; LLJ:FSE). These decisions, which Emerita detailed in a press release, all have been against the company also bidding for Aznalcóllar.

"The outcome looks to be quite positive for Emerita and points to a higher probability that the company will eventually be declared the winning bidder for the tender," wrote Schatzker. "If Emerita is declared the winner, our target price would, all other things being equal, increase to CA$3.30 per share." The current target price is CA$2.30/share, and the share price is trading at around CA$1.15.

Schatzker added that "Emerita is an excellent vehicle for investors to gain exposure to very promising base metal projects in Spain (including the already-won tender for the IBW project)."

The analyst listed some of the points Emerita made in its recap of legal decisions regarding the Aznalcóllar tender process and noted that in sum, they "seem to favor" the Canadian explorer.

Emerita's release indicated that three Spanish courts, of various levels, deemed that crimes had been committed during the Aznalcóllar tender process. A provincial court ruled that the investigation into the allegations was finished and closed, thus past the point of appeal, and the next step was a formal trial of the defendants. Further, the charges against some of them are more serious than prevarication, the least serious corruption offense, and the convicted may have to serve prison time. Another recent decision required all 14 accused individuals, rather than just seven as previously determined by the courts, to face possible sentencing.

"We do not know how long the process will take before the final decision on the tender process is made and whether there are any other legal paths the opposing party can take at this time," Schatzker wrote. "However, it appears that the other party may have run out of options."

Research Capital has a Speculative Buy rating on Emerita.

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
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ANALYST CERTIFICATION
I, Adam Schatzker, certify the views expressed in this report were formed by my review of relevant company data and industry investigation, and accurately reflect my opinion about the investment merits of the securities mentioned in the report. I also certify that my compensation is not related to specific recommendations or views expressed in this report.

Each analyst of Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst's compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein.