RE: Hannam3 Feb 2021 14:31
Then there is some dreary bo l lox about Blanca and Rio saying they'll get around to a bit of drilling here and there now and again...yad yada....
then this final para:
Alpala PFS likely around end Q1;
stock remains at steep discount to DCF value Despite changes to its senior management announced last month, SOLG’s strategy remains to create value through systematic exploration, discovery and development in the under explored Ecuadorean section of the prolific Andean Copper Belt. As outlined in our Dec 23rd update, our DCF model for Alpala is based on the “50Mtpa –fast” scenario, as presented in SOLG’s 2019 PEA, with adjustments made to the initial capex budget (H&Pe ~US$2.94bn) and grade profile to account for likely revisions to the underground design flagged by the Company late last year on the back of the latest geotechnical data. The PFS was scheduled to be drafted and submitted to the Board for approval by roughly the end of Jan’21, which suggests to us that the final PFS report should be released to the market around the end of Q1. This is to be followed by an “updated PFS”, incorporating further data, ahead of the DFS. We apply a target multiple of 0.8x to our Alpala NPV, which remains US$4.2bn, using an 8% WACC, $7,000/t long-term copper price and US$1,950/oz long-term gold price. We currently include a modest US$75m in further value for SOLG’s other exploration assets across Ecuador, recognising that there could be significant upside to this figure as the scale of potential Resources at Porvenir in particular and, in time, Varela, begin to take shape. Adjusting for potential dilution from outstanding warrants/options, this translates to a target price of 105p/share, ~248% above the current share price.
end.
Z
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