TD raises Target to $21.00Event Yesterday, during market hours (the stock was halted pre-market), Solaris announced a significant new discovery in maiden drilling of the Warintza East target at its Warintza Project in southeastern Ecuador. I
mpact: POSITIVE
The discovery at Warintza East marks the third major copper discovery within the 7km x 5km Warintza porphyry cluster. More importantly, the footprint of Warintza East overlaps conceptual pit designs for Warintza Central, which itself continues to grow eastward with recent results (see 'Central Strike Extended to 1,250m'). Future drilling will focus on the open, undrilled area between these two zones (each hole potentially has a higher impact as is in the pit).
SLSE-01 was the first hole ever drilled at Warintza East and collared approximately 1,300m east of Warintza Central, where recent eastern extension drilling intersected 1,000m of 0.60% CuEq from surface, with the Central zone still open in this direction.
SLSE-01 was drilled to a total depth of 1,213m with assays reported herein for the first 320m of core from surface (results for the rest of the hole are expected in late-August/early-September).
SLSE-01 returned 320m of 0.46% CuEq from surface, including 54m of 0.70% CuEq, marking a significant new discovery from surface at Warintza East.
As a reminder, the company is planning to release an updated Central resource in H2/21. We currently anticipate resources of ~620 Mt at 0.51% Cu (0.65% CuEq); however, recent drilling suggests that we could potentially see a bigger resource. The historical Warintza Central resource is 124 Mt Inf grading 0.70% CuEq, based on drilling of <7 km.
At this time, we have made no changes to our estimates and our corporate NAV10% of C$19.04/share remains unchanged. Our target price increases to C $21.00 (from C$20.00) on a higher multiple (now 1.10x, up from 1.05x), which reflects the recent promising exploration results.
TD Investment Conclusion World-class discoveries are rare and unique, and we believe that Solaris is in the early stages of making multiple world-class discoveries among its cluster of porphyries on the Warintza property. We expect the stock to continue to re-rate higher as the company demonstrates the growth potential of the project.