In the southeastern region of Ecuador, an ambitious copper exploration initiative is taking shape, promising to revolutionize the way the industry operates. The Warintza Project, wholly owned by junior copper exploration company Solaris Resources (TSX:SLS) (OTCQB:SLSSF), stands as an epitome of world-class, outlining economic advantages that set it apart from other global projects.
Economic Advantages
Solaris Resources unveiled its mineral resource estimate for the Warintza Project in April last year, outlining 1.5 billion tonnes of 0.5% copper equivalent primarily from the Central deposit. This vast copper resource is remarkable on a global scale, yet the truly groundbreaking aspect lies in the high-grade starter pit. The starter pit contains 0.3 billion tonnes of 0.8% copper equivalent, a strategy designed to front-end load the cash flows and kickstart robust economics.
Industry analysts estimate this starter pit could generate a $50 per tonne margin. With an annual throughput of 40 million tonnes, this would translate into a staggering $2 billion per year of EBITDA for nearly 7.5 years. Over a nearly 40-year mine life, this means the project could pay back its capital investment in just about two years—a feat virtually unheard of for a project of this scale.
Geographic and Logistical Superiority
The Warintza Project also offers significant geographical and logistical advantages. The project is set within a mining district featuring access to a highway, abundant and low-cost hydroelectric power, access to fresh water, labour and low elevation. In addition, the resource inventory is surrounded by three adjacent discoveries with footprints of equal or larger size, representing multiple times growth potential. This strategic location provides Solaris with access to a wealth of untapped resources, significantly amplifying the robustness of the project.
The company also recently discovered a potentially well-mineralized porphyry, dubbed Patrimonio, located immediately southwest of the mineral resource shell. Drilling at this new target has commenced with assays expected to be received in a few weeks. If successful, Solaris may discover a second high-grade starter pit, further amplifying the economic proposition of the project.
A Standout Project Among Its Peers
While Warintza has been making significant strides, there are other copper exploration projects that have been making news. Challenger Exploration, for example, recently reported two gold-copper discoveries in its concession in Ecuador. However, the details of these findings and their potential economic impact are still under investigation, making it difficult to draw a direct comparison with Warintza.
Similarly, in Peru, Chakana Copper Corp., a Canadian-based minerals exploration company, is advancing the Soledad project near Aija, in the Ancash region. The company has recently made a significant breakthrough with the discovery of a new high-grade copper-gold-silver deposit. The company has an ambitious expansion plan, intending to increase its exploration efforts both in the South and North areas to uncover additional high-grade deposits and maximize its mineral resource portfolio.
While some other junior copper exploration companies have similar-sized projects, Solaris Resources’ approach to the Warintza Project sets it apart from the crowd. Unlike other companies that follow traditional operational strategies, Solaris has adopted a unique approach that leverages the project’s location, estimated resource, and the company’s economic strategy. Through the implementation of the high-grade starter pit strategy, Solaris aims to front-end load cash flows and generate solid economics right from the outset. The strategic geographical positioning of the project and the potential of adjacent discoveries further contribute to making the Warintza Project a standout initiative in the copper exploration industry.
A New Era for Copper Exploration
As the world pivots towards sustainable energy sources and electric mobility, the demand for copper is expected to surge in the coming years. In this changing landscape, the Warintza Project emerges as a game-changer, promising to redefine the copper exploration industry with its unique starter pit approach and significant economic advantages.
