San Lorenzo Gold Corp V.SLG.RT

Primary Symbol: V.SLG Alternate Symbol(s): SNLGF

Metals & Mining Gold

San Lorenzo Gold Corp. is a Canada-based company engaged in the business of exploring for and advancing mineral properties. It is engaged in exploring for gold/copper (with molybdenum/silver) porphyry and epithermal vein systems in Chile. Its properties include Salvadora, Nancagua, and Punta Alta. The Salvadora property is being explored for large scale copper-gold porphyry targets and high-grade epithermal gold-silver-copper vein systems. The Project consists of about 25 exploration concessions and nine exploitation concessions totaling 8,796 hectares (ha). The Nancagua Property is a high grade mesothermal gold-silver prospect and has six linear kilometers (km) of veins. The Property is located approximately 120 km south of Santiago, Chile. The Punta Alta property consists of seven exploration concessions totaling 2,000 hectares and is located eight kilometers north northwest of the historic Carrizal Alto copper-gold-cobalt mining camp in the Coastal Cordillera of Region III, Chile.

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San Lorenzo Gold Corp

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Post by scissors14on Apr 16, 2011 10:08am

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Post# 18440976

RBC Price Target Revision To $6.50

PRICE TARGET REVISION | COMMENT

APRIL 12, 2011

Sterling Resources Ltd. (TSXV: SLG)

Still to Make Contact

Outperform
Speculative Risk
Price: 4.68
Shares O/S (MM): 184.6
Dividend: 0.00
NAVPS: 6.50
Float (MM): 182.6
Price Target: 6.50 6.00
Implied All-In Return: 39%
Market Cap (MM): 864
Yield: 0.0%
P/NAVPS: 0.7x
Major Shareholders: Institution #1, 15.7%
Latest Cladhan appraisal well extends field size with oil
water contact yet to be found; raising price target to
C$6.50

We are reiterating our Outperform rating and raising our price target to C$6.50

following the first of three Cladhan appraisal results. The absence of an oil water

contact indicates that further significant upside remains within the Northern

North Sea discovery with a P10 case of over 200mmbbls recoverable (SLG

39.9% and operator).

Partial de-risking of Cladhan increases NAV: We have revised our Sterling
PV12.5% NAV to C$6.50/share from C$6.05 on today’s news. This reflects an
increase in our risked valuation of Cladhan to C$2.50/share from C$1.99. The
unsuccessful Grian exploration well, also announced today, knocks C
.06/share
off our valuation.
Successful appraisal: The 210/30a-4 well encountered two hydrocarbon-bearing
reservoir zones, increasing the likely size of the previously drilled northern
channel and de-risking the fan system to the east. The basal reservoir contained
21ft of net pay across a 256ft gross column – in line with management’s
expectations – and is believed to be in communication with the original Cladhan
discovery. An additional upper reservoir contained 13ft of net pay across an 18ft
gross column within a separate pressure system. Management believe the sands
will thicken downdip within the fan system.
Next appraisal result in early May: A sidetrack will now be drilled 1.8km to
the southeast, targeting the fan system, and is scheduled to take 20-25 days. The
fan system has estimated prospective STOIIP of 32-143mmbbls. The partners
then plan to drill a second sidetrack into the untested central channel system,
concluding the current appraisal campaign in June. Confirmation that Cladhan
contains over 200mmbbls recoverable could add ~$2.20/share (or 34%) to our
valuation.
FY10 results on April 19: After the company raised ~C$85m in new equity in
December, we are anticipating a year-end cash balance of C$142m. Key
operational updates we will be looking for in the release include: timing of FDP
approval for the Breagh development and any changes to the development
schedule; status of the agreed debt facility to partially fund Breagh development
costs; and any further detail on management’s intention to seek a London listing
for the stock. We do not anticipate any new material news on Cladhan given the
ongoing drilling campaign.