Solaris’s resource boost for Warintza copper project beats analysts’ predictions 

Solaris Resources (TSX: SLS; US-OTC: SLSSF) has posted an updated resource estimate for the Warintza Central deposit at its Warintza copper project in southeastern Ecuador that has expanded inferred tonnage by seven times, includes a first-ever indicated resource, and has also outlined a potential starter pit.  

The property now has indicated resources of 579 million tonnes grading 0.47% copper, 0.03% molybdenum and 0.05 gram gold per tonne for 2.7 million tonnes of copper, 150.000tonnes of molybdenum and 930,000 oz. of gold. Inferred resources add 887 million tonnes grading 0.39% copper, 0.01% molybdenum, 0.04 gram gold for 3.5 million tonnes of copper, 0.13 million tonnes of molybdenum and 1.1 million oz. gold.  

The project’s previous resource estimate totalled 124 million tonnes grading 0.56% copper, 0.03% molybdenum and 0.1 gram gold per tonne in the inferred resource category. 

“The update is very significant because the copper industry hasn’t made any discoveries of a globally significant scale, such as this Warintza mineral resource estimate, since Ivanhoe Mines Kamao-Kakula discovery in 2014,” Jacqueline Wagenaar, the company’s vice president of Investor Relations told The Northern Miner by mail.  

The Kamoa-Kakula copper project is a joint venture that analysts from Wood Mackenzie ranked as one of the world’s largest, undeveloped coppery discovery. The joint-venture project has resources of 1.3 billion tonnes grading 2.74% copper in the indicated category and 339 million tonnes grading 1.68% copper in the inferred.  

The Warintza project covers about 268 sq. km. and is located about 60 km north of Lundin Gold’s (TSX: LUG) Fruta del Norte gold mine, which produced 428,514 oz. of gold in 2021, and about 30 km north of the Mirador copper-gold mine, which began production in 2019.  

It is situated within a mining district that has access to a highway, a low-cost hydroelectric power, fresh water and low elevation. 

The latest update also includes a potential starter pit of 180 million indicated tonnes grading 0.67% copper and 107 million inferred tonnes grading 0.64% copper.  

Managed by the Augusta Group, which has totaled over $4.5 billion in exit transactions over the last decade, Solaris’s goal is to add value to its project through exploration and then “crystallize it through an exit transaction” said Wagenaar. 

The company believes Warintza could play in important role to meet the globe’s increasing demand for copper in the coming years.   

“We estimate that, in addition to brownfield expansions, over 100 new copper mines must be built to address this gap by the end of the decade, which makes every new project, particularly projects of robust grades and great scale set within mining districts rich with infrastructure, like Warintza, very important,” said Wagenaar.  

BMO’s Rene Cartier described the latest update as “larger than expected” in a research note to clients.  

“Compared with our estimate of a mineable resource of 1 billion tonnes at 0.5% copper, Solaris delivered significantly higher tonnage, while the copper grade was slightly lower, and other by-products were relatively in line,” Cartier wrote. “There remains meaningful upside for additional resource growth.”  

Scotiabank analyst Eric Winmill described the company’s update as positive and said that it reaffirmed Warintza as a “high quality, large-scale copper asset.”  

“We view the latest resource update as a positive for SLS shares. This represents an important catalyst event and exceeds our conservative resource assumption of 700 million tonnes grading 0.5% copper,” wrote Winmill in a research note to clients. “Exploration is ongoing at the deposit with a $30 million exploration budget planned for this year.” 

The latest resource is based on nearly 75,000 metres of drilling in about 100 holes since drilling recommenced in 2020, the analyst added.  

At mid-day in Toronto, Solaris Resources was trading at $15.30 per share, up 65¢ or 4.4%, within a 52-week trading range of $8.77 and $17.17. The company has 108.8 million common shares outstanding for a market cap of $1.6 billion.