DGR, page-5

Posted by schlemiel on Fri., 17.25 Uk 'Solgold Share Discussion Tread

"SolGold Plc.Growing Monster with Largest Predators CirclingImpact: PositiveWe are publishing our initial estimates on SolGold Plc with a NAVPS8% of C$1.30. SolGold’s Alpala deposit is a world-class copper project with significant exploration upside. We believe SolGold’s asset suit is coveted by multiple major miners that may lead to a competitive takeout scenario over the next two years. We view Alpala and the wider Cascabel project as a world-class deposit with scale potential that separates it from the pack. We believe the maiden resource is set to double in December with room to grow further. As a result, we believe that the significant interest that major copper miners already have in SolGold is about to heat up.Investment Thesis: Already a World-Scale project with solid economics. The size and grade of this project places it among the largest undeveloped copper projects in the world (Figure 2) and our estimates suggest that Alpala would be one of the larger lower cost producers in the world once in production (Figure 3 & Figure 28). This monster is about to have a high-grade growth spurt and may double again thereafter. We believe the resource is set to double with the Q4/18 update. More importantly, we believe the high-grade core is set to grow by 50% improving project economics (we estimate project post-tax NPV8% of C$2.38B and an IRR of 20%). As well, preliminary evidence suggests the company may have only found “half” the deposit and could double it again with 2019 drilling (see section on Geology). Largest mining predators circling. With few available undeveloped world-class copper assets, major mining companies have been on the hunt globally for projects such as Cascabel. With two majors already on the share register, our expectation is that a takeout is likely by the end of 2020. Valuation: Market is not pricing in pending resource update, let alone the premium warranted for this world class deposit. We believe that the pending resource update and ongoing exploration success are likely to drive our base case NAVPS8% to C$1.30. While SolGold already trades at a premium to peers (0.49x NAV vs peers 0.37x), we believe a further premium is warranted given the scarcity and scale of Cascabel and that willing suitors are ready to pounce. Upcoming catalysts: 1) Ongoing exploration, 2) Resource update (Q4/18) and 3) Maiden PEA (Q1/19).

http://www.redcloudks.com/companies/solgold-plc"