High-Grade Breccias in Stable Jurisdictions
We initiate research coverage of Eloro Resources with a Buy rating and a fully diluted price target of CAD 15.80 per share, representing 314.7% upside from the current share price. Our price target is derived from the in-situ valuation of the Santa Barbara Breccia Pipe of its property Iska Iska in Bolivia, for which we calculated a NAV estimate of CAD 1,476.5 million. We applied a 0.8x multiple to our net asset value per share estimate to arrive at our target price of CAD 15.80 per share. Other assets (above all La Victoria in Peru) were not included in our valuation. We like to highlight that the current pullback in the company’s stock price (during its recent financing rounds), could be an interesting entry point for investors, as Eloro Resources is now ideally positioned, in our view, to aggressively advance its current portfolio of development projects. Should the company be able to make a discovery and eventually delineate a mineral resource at Iska Iska, we believe the share price could quickly re-rate towards our price target.
Eloro Resources is a Canadian-based exploration and development company that controls a portfolio of high-grade gold and silver projects in mostly stable jurisdictions in Bolivia, Peru, and the Canadian province of Québec. Eloro Resources states that it has recently intersected very encouraging silver, gold, and base metals mineralization at its most valuable Iska Iska flagship property in Bolivia – a stable mining jurisdiction in close proximity to world-class polymetallic mines and mineral deposits like the world’s largest silver deposit Cerro Rico de Potosí, attracting increasing interest from major miners.
Drilling confirmed ASTER satellite data suggesting a breccia pipe with a total effective mineralized diameter of at least 600 m at Iska Iska. Breccia pipes are usually important hosts of large tonnage ore bodies in many producing mines in epithermal and porphyritic deposits, particularly in the Andean Cordillera of Central and South America. With silver equivalents (Ag EQ) of up to 442 g/t in continuous channel sampling of the Santa Barbara adit, drilling strongly support the geologists’ assumption, that the breccia is a medium to high grade polymetallic deposit, where several different metal phases are found in the ore – in addition to silver mainly zinc, lead, gold, copper, bismuth, tin, and indium.
Recent findings demonstrate that Iska Iska not only seems to be mineralized everywhere the company has drilled so far, but also, that Iska Iska contains sections of extreme high grades, which in our view, could create a bulk tonnage potential in Iska Iska.
Eloro Resources is an exploration and mine development company with a portfolio of gold and base metal properties in Peru and northern and western Quebec.
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