TSX:SLS - Post Discussion
Post by
HARJAY on Feb 06, 2024 11:55pm
From the CEO site - FYI
@valUdeepdive National Bank: "Solaris currently has two drill rigs in operation at Warintza and expects to have six rigs turning by the end of February. The company is using proceeds from the previously announced US$80 mln off-take financing (see our flash dated December 11, 2023) to fund the 2024/2025 programs targeting an updated resource, PEA, permitting and community social relations programs. The Company awaits closing of the recently announced US$130 mln strategic investment by Zijin (see our flash dated January 11, 2024). The Company has made a formal submission to the Investment Review Division (IRD) which administers the Investment Canada Act. Steps in the process and the maximum timelines are as follows: • Initial submission occurred early January 2024 (following Consultations which began in 2023) • Initial Review can take up to 90 days (mid-April) • National Security Review can take up to 45 days (late May), with a possible extension of 45 days (early July) • Final Decision can take up to 20 days Solaris continues to expect the transaction to close in Q2/24 given previous consultation with the IRD and the lack of sensitivity of the transaction (as copper is not classified a critical mineral, Warintza is in the exploration stage of development and project is located in Ecuador). In the past, there have been copper transactions/investments that would be subject to review under the ICA critical minerals policy given its breadth, but no history of any divestiture orders or transactions being rejected except for a small number in the most sensitive parts of the critical minerals list (including: lithium, graphite). On the contrary, some copper transactions announced and closed that would be subject to the policy that would be deemed more sensitive than Solaris/Zijin as they relate to a change of control, and/or on more advanced assets. We model a total global resource of 1.02 bln tonnes within the Warintza Central deposit grading 0.55% CuEq; within that estimate is a smaller, near-surface zone of ~180 mln tonnes grading 0.82% CuEq that supports the initial six years of mine life. We expect an expansion of this high-grade core in an upcoming resource update following Solaris's exploration program over the past year. At Warintza East, drilling to date outlines an area" 1
@valUdeepdive /2 "containing incremental tonnes at an average intercept of 0.36% CuEq which supports longer-term expansion potential within the existing land package. Upcoming catalysts include: • Additional expansion exploration results from Warintza and Patrimonio (H1/24) • NYSE Listing (H1/24) • Warintza resource update (Q2/24) • Warintza EIA submission (H2/24) • A Warintza pre-feasibility study (TBD) Our Outperform rating is based on Warintza’s large-scale/near-surface resource, attractive project economics and management’s track record for generating shareholder value. Our valuation methodology of 0.70x NAV is derived from the quality of exploration results to date with multiple expansion likely to stem from the project advancing through feasibility. Precedent acquisition multiples in the base metal developer space have taken place as high as 0.8x - 1.0x, with higher multiples ascribed to more advanced projects within stable jurisdictions. SLS is currently trading at a P/NAV of 0.37x vs. developer/single-asset copper peers at 0.61x."
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