Solaris Resources (SLS.TO) Update - Jan 17

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Solaris Resources (SLS.TO) Update - Jan 17

Post by dan_s »

January 17, 2023 – Vancouver, B.C. – Solaris Resources Inc. (TSX: SLS; OTCQB: SLSSF) (“Solaris” or “the Company”) is pleased to report assay results from a series of holes aimed at growing mineral resources at the Warintza East discovery within its Warintza Project (“Warintza” or “the Project”) in southeastern Ecuador.

Note below is from one of our super smart members in Calgary.

Solaris updated their latest Warintza East drilling this morning, which is significant. As a reminder, their resource report from last year highlighted close to 1.5B Mt CuEq resources above a cutoff of 0.30% CuEq including an Indicative Starter Pit of 180 Mt CuEq. They have drilled several new holes in the “Indicative Starter Pit” this year and we are assuming at a minimum, they double the size of the resource through their 2022 drilling campaign ~ +400 Mt. As a reminder, a potential buyer could spend close to 10 years (40 Mt/a year plant) just drilling the much higher grade starter pit. SLS also spent 2022 actively drilling outside of the Warintza starter pit and we are expecting their total resource to be well beyond the 2BB+ Mt CuEq cut-off grade of 0.30%. The economics for a potential suitor has become significantly more robust in 2022. Please keep in mind we are now 348 days away from what many experts believe to be the first year of the structural deficit in copper.

Highlights

SLSE-16: 108m of 0.57% CuEq within a broader interval of 712m of 0.45% CuEq from surface, extending mineralization to the south and southeast where it remains open
SLSE-17: 144m of 0.52% CuEq from surface within a broader interval of 914m of 0.40% CuEq, extending mineralization to the east where it remains open
SLSE-19: 270m of 0.40% CuEq from surface within a broader interval of 580m of 0.31% CuEq, expanding the footprint to the northeast where it remains open
Assays pending from a series of extensional holes to the north, east, south and southeast
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MY TAKE: Solaris has discovered and is proving up a "World Class" copper discovery Ecuador. This Company's management team has a strong track record of success is finding and selling discoveries like this for large profits.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Solaris Resources (SLS.TO) Update - Jan 17

Post by dan_s »

I am bullish on copper, a strategic metal whose price should go a lot higher if we can avoid a Major Recession.

Trading Economics:
"Copper futures eased slightly to $4.1 per pound after touching a seven-month high of $4.2 on January 13th as concerns surrounding lower global growth halted the rally triggered by China’s economic reopening. Still, copper prices have remained more than 9% higher since the start of the year after major industry players warned that worldwide production would be unable to keep up with higher demand as modern economies transition to copper-dependent renewable energy sources. Disruptions to mining activity in Peru heightened shortage worries, while top producer Chile forecasted its output to contract by nearly 6% in 2023. Inventories at the LME and SHFE warehouses fell to under 186.4 thousand tonnes, enough to support global consumption for just over two days. Consequently, mining giant Glencore estimated a cumulative supply shortfall of 50 million tonnes until 2030."
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Solaris Resources (SLS.TO) Update - Jan 17

Post by dan_s »

From Reuters: January 17, 2023 8:43 AM CST
Column: Funds jump back into copper, betting on Chinese recovery
By Andy Home

LONDON, Jan 17 (Reuters) - Copper has begun the New Year on a surge, with funds piling back into the market in anticipation that China's rapid emergence from a year of lockdowns will translate into recovering demand in the world's largest metals buyer.

London Metal Exchange (LME) three-month copper broke back up through the $9,000-per tonne level last week for the first time since June. Currently trading around $9,130, the copper price is up by 9.6% since the start of January.

The rally has been driven primarily by shifts in fund positioning on both the LME and the CME with the bulls back in town and bears in retreat.

Investors played copper from the short side for much of last year, if they were prepared to engage at all. Rolling lockdowns in China, an energy crisis in Europe and aggressive rate hikes in the United States were all good reasons to give Doctor Copper a wide berth.

The funds' sudden return is a sign that many are betting on a much sunnier outlook.

BULLS BACK IN TOWN
Money managers have rapidly accumulated long positions on the CME copper contract this month, lifting bets on higher prices by 32% to 65,703 contracts, according to the latest Commitments of Traders Report.

The resulting price surge has forced bears onto the back foot, outright short positions sliding from 40,807 contracts to 36,907 in the week to last Tuesday.

Funds were net long to the tune of 28,796 contracts on that date, the most bullish collective positioning since last April.

The same dynamic is playing out on the London market with the price rally placing some $3 billion of short positions under pressure, according to analysts at Citi. ("Metal Matters", Jan. 17, 2023)

Citi estimates a 400,000-tonne collective investment short position was accumulated over the middle of last year in a $7,800-8,600 price band. "To the degree these short positions have not already covered, this may support copper in the short term", the bank said.

BACK IN FAVOUR
Renewed speculative interest in copper has been evident for several months with global trading activity showing signs of recovering from a long slump.

All three major copper venues - the LME, CME and the Shanghai Futures Exchange (ShFE) - saw volumes and open interest fall consistently over much of 2021 and the first half of 2022.

The market stopped contracting around July, with both the LME and CME registering consistent year-on-year volume growth over the back end of 2022.

LME copper volumes ended the year down by just 1.9% on 2021 levels, the most resilient performance among the core contracts in a year of nickel-induced turmoil on the London market.

CME futures open interest fell to 149,642 contracts at the end of November, its lowest end-month level since 2014. It has since rebounded to a current 198,018.

CME options trading has been booming. Volumes of vanilla monthly options hit an all-time record of 126,171 contracts in November. Open interest at the end of December was also an all-time high of 82,599 contracts.

Activity has spread to the CME's newer weekly options contracts and its "micro" copper product, a tenth the size of the main contract but one that has already traded the equivalent of over 600,000 tonnes since its May launch.

Doctor Copper, it seems, is back on the investment radar after a year in the wilderness.

THE ONLY WAY IS UP?
Investors' rekindled enthusiasm for copper's prospects jars with the current somewhat gloomy picture of industrial recession in Europe and sharp economic slowdown in the United States.

The World Bank last week slashed its global growth forecast for this year from 3.0% to 1.7% the slowest pace outside the 2009 and 2020 recessions since 1993.

It's clear, though, that copper long positioning is primarily a bet on Chinese recovery, underpinned by measures to revitalise a foundering property sector and more metals-intensive green infrastructure.

It's worth noting that copper's gains have been overshadowed by those of iron ore, which is even more leveraged to a resumption of Chinese property construction. Dalian iron ore futures jumped 3% last Friday to hit 17-month highs.

Both commodities are pricing in a full-blown bounce-back in Chinese activity after the New Year holidays.

How optimistic a scenario that is remains to be seen. There is plenty of uncertainty around COVID transmission rates, the timing of any meaningful turnaround in the property market and the likely negative hit on exports from slower growth everywhere else.

If copper is already pricing in a full recovery, reality is only likely to disappoint.

Doctor Copper's new fund friends may have to be patient.
Dan Steffens
Energy Prospectus Group
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