From Scotia this MorningSolaris Resources Inc. Maiden Drilling at Warintza East Returns New Discovery
OUR TAKE: Positive.
Solaris Resources announced maiden results from drilling at Warintza East that returned 320m grading 0.46% copper equivalent (Cueqv) from surface, including two higher-grade intervals: (i) 54m grading 0.56% Cueqv from surface and (ii) 54m grading 0.70% Cueqv, from 162m to 216m downhole. Importantly, assay results from surface to a depth of 320m were prioritized, with assays from the remainder of the hole expected in late August/early September.
This represents a new discovery at Warintza East located ~1,300m east of Warintza Central. Future drilling will be focused on the open area between Warintza Central and Warintza East in addition to testing of other nearby target areas.
We view these results positively as they not only outline a new discovery at Warintza East but also offer potential for resource additions in the future. We rate SLS shares Sector Outperform with a C$14 price target. KEY POINTS Detail – Hole SLSE-01 was drilled ~1,300m from Warintza Central to a total depth of 1,213m.
This is the third major copper discovery within the 7km x 5km Warintza porphyry cluster. The location of the Wartinza East drilling is shown in Exhibits 1 and 2. Valuation – We include an exploration upside component in our NAV estimate ($200M); however, our DCF-analysis does not factor in any additional mined tonnes from other nearby deposits, such as Warintza East, West, South, or Yawi. SLS shares are currently trading at 0.84x our NAV10% estimate.