MetalQuest Mining Inc.
Advancing Lac Otelnuk Amid Canada’s Critical Iron Ore Focus
Published: Nov 1, 2025
Author: FRC Analysts
Disclosure: MetalQuest Mining Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Company Details
Sector – Basic Materials / Industry – Other Industrial Metals & Mining
Trading Information
Ticker & Exchange – MQM.V: TSX E7Q.F: FWB
Report Highlights
- MQM is up 280% YTD, significantly outperforming the TSXV’s 54% over the same period.
- In June 2025, MQM commissioned AtkinsRéalis, an engineering services firm, to conduct a gap analysis of the 2015 Feasibility Study (FS) on the project. The study aims to identify any required updates for market trends, regulations, engineering practices, and environmental standards. Following this, management plans to carry out targeted technical reviews and studies before advancing to a Prefeasibility Study (PFS).
- Earlier this month, MQM appointed a steel and mining veteran with 30+ years at JSW Steel (500228) and Tata Steel (BSE: 500470), as a strategic adviser. He also led a $1.5B Labrador Trough iron ore project from JV and feasibility to construction and full-scale ramp-up.
- Lac Otelnuk hosts one of North America’s largest undeveloped iron ore projects, with a large open-pit historic resource potentially supporting a 100+ year mine life. The 2015 FS reported an AT-NPV8% of US$5.24B, based on a long-term iron ore price of US$105/t (spot: US$106/t), initial CAPEX of US$9.4B, and OPEX of US$31–34/t.
- Given the project’s capital intensity, we believe success largely depends on management’s ability to secure financing or a strategic partner.
- Iron ore, primarily used for steel production, has been relatively stable over the past year, rising 2% YoY to US$106/t. The designation of high-purity iron on Canada’s Critical Minerals list enhances the project’s eligibility for federal and provincial funding and tax incentives, potentially accelerating development and supporting Canada’s critical minerals supply chain.
- MQM’s Enterprise Value (EV)/Resource and EV/AT-NPV remain materially lower than those of comparable iron ore juniors.
- MQM also holds 1.92M shares and 2.50M warrants in Canadian Copper Inc. (CSE: CCI), currently valued at $1.03M, and a 1% NSR on the Murray Brook project. A recent Preliminary Economic Assessment (PEA) on the project showed an after-tax NPV7% of $171M, and an IRR of 36%.
- Upcoming catalysts include a potential option or joint venture partnership and updates on the gap analysis.
Price and Volume (1-year)
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
- Buy – Fair value is 12% above the current market price; or risk and reward is favorable
- Hold – Fair value is between 5% to 12% above the current market price
- Sell – Fair value is 5% above, or less, than the current market value; or risk and reward is unfavorable
- Suspended or Rating N/A – Coverage and ratings suspended until more information can be obtained from the company regarding recent events.
Fundamental Research Corp. – Risk Rating Scale:
- (Low Risk) – The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.
- (Below Average Risk) – The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.
- (Average Risk) – The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.
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