Solaris Resources Inc T.SLS

Alternate Symbol(s): SLSR

Metals & Mining Industrial Metals & Minerals

Solaris Resources Inc. is a Canada-based multi-asset exploration company that is engaged in advancing a portfolio of copper and gold assets in the Americas. Its Warintza property is a porphyry copper-molybdenum-gold project located in southeastern Ecuador in the province of Morona Santiago. It includes nine metallic mineral concessions covering 26,777 hectares (ha). The Ricardo property is an exploration porphyry copper prospect located near Calama, Chile in the Calama Mining District. Its claim block covers approximately 16,000 ha. The Tamarugo property is a grass-roots copper porphyry target located in northern Chile approximately 85 kilometers northeast of Copiapo. Its claim blocks cover a total of approximately 12,300 ha. The Capricho project is a 4,200-ha copper-molybdenum-gold property. The Paco Orco project is a 4,400-ha lead, zinc and silver property. The La Verde property is situated in the Sierra Madre del Sur west of Mexico City, including the Unificacion Santa Maria claim.

TSX:SLS - Post by User

Solaris Resources Inc

<< Previous

Bullboard Posts

Next >>

Post by savyinvestor333on Jun 10, 2022 7:05am

228 Views

Post# 34746276

From Scotia this Morning Positive

Metals & Mining

Solaris Resources Inc.

SLS-T: C$11.09
Target: C$19.50
Rating: Sector Outperform

Investment Protection Agreement (IPA) for Warintza Project

OUR TAKE: Positive. Solaris Resources announced an Investment Protection Agreement (IPA) with the Government of Ecuador for its Warintza Project in southeastern Ecuador. The IPA provides assurance in regard to the legal framework of the Project, which includes stable mining regulations, security of title and investment for the term of the agreement, and tax incentives to accelerate development. The signing ceremony for the IPA is expected to take place in the village of Warintza in July 2022.

We view this announcement positively, as we see this providing further in-country support for the Warintza project to encourage sustainable economic growth within Ecuador. We rate SLS shares SO with a C$19.50 PT.

KEY POINTS

Detail – The tax incentive includes a 5% reduction of income tax (fixing the rate to 20%; by comparison we continue to model a more conservative tax rate of ~27%), exemption from capital outflow tax, and exemption of all import duties for investments related to the Project. Other protections include prohibition of all forms of confiscation, non-discriminatory treatment, legal security, tax stability, and international arbitration if there are any disputes in the duration of the Project.

Valuation – At Scotiabank GBM’s long-term copper price assumption of $3.50/lb, SLS shares are currently trading at 0.57x our P/NAV10% estimate vs. base metal developer peers at 0.66x; however, we believe Solaris shares can re-rate higher and should trade at a premium given Warintza’s relatively high-grade nature and continuous tenor of mineralization, good access to infrastructure, exploration upside, and backing by a well-known management team at Augusta Group with a proven track record.

Historical price multiple calculations use FYE prices. All values in US$ unless otherwise indicated.
Source: FactSet; company reports; Scotiabank GBM estimates.


Qtly Adj EPS (FD)	Q1	Q2	Q3	Q4	Year	Price/Adj. EPS
2021A	$-0.12	$-0.11	$-0.12	$-0.17	$-0.52	n.m.
2022E	$-0.05	$-0.05	$-0.05	$-0.05	$-0.19	n.m.
2023E	$-0.04	$-0.04	$-0.04	$-0.04	$-0.15	n.m.

Company Overview

Company Description

Solaris is a copper exploration company with its flagship project, Warintza, a wholly owned copper development project, in Ecuador. In addition, the company has a number of other early-stage copper properties in the Americas.