Solaris Resources (NYSEAM:SLSR) Update Summary Company Overview - Solaris Resources is presenting a significant copper project known as the Warintza project, which is characterized as a multi-generational project with a mine life exceeding 50 years, a rarity in the current market [2][3][25]. Industry Context - Global copper demand is projected to surge by 24% by 2035, necessitating an additional 1 million tons of production annually [3]. - The Warintza project is positioned as a near-term executable project to meet this increasing demand [3]. Key Financial Metrics - The pre-feasibility study (PFS) indicates a 312% increase in measured and indicated resources compared to the previous year [4]. - The project is expected to produce over 300,000 tons of copper equivalent in the first five years and over 240,000 tons in the first 15 years [5]. - The all-in sustaining cash costs are projected at $0.85 per pound for the first five years and $1.07 for the first 15 years [5][11]. - The post-tax NPV at an 8% discount rate is estimated at $4.6 billion, with a post-tax IRR of 26% and a payback period of 2.6 years [5]. Resource and Reserve Estimates - The mineral resource increased by 38% in 2025, totaling 5.8 billion tons, which includes 3.7 billion tons in the measured and indicated category and 2 billion tons inferred [6]. - The reserves support a 22-year operational life, with potential to extend by 25-30 years [6][15]. Project Design and Operational Efficiency - The project features a low strip ratio of 0.53:1, one of the lowest globally, which enhances cost efficiency [5][10]. - The mine design is simple and environmentally encapsulated, facilitating effective water management and minimal environmental impact [12][17]. - The project is fully funded for the feasibility study through a $200 million financing package from Royal Gold [4][24]. Social and Environmental Considerations - Solaris Resources has established partnerships with indigenous organizations and is committed to maintaining a social license to operate [13][14]. - The company has engaged in a free, prior, and informed consultation process with local communities, which is crucial for project approval [34]. Infrastructure and Logistics - The project benefits from Ecuador's strong infrastructure, including roads, ports, and power supply, which are essential for operational efficiency [23][41]. - The distance to Port Bolívar is approximately 340 km, with well-established road access [23]. Future Outlook and Strategic Plans - The company aims to complete the feasibility study and obtain technical approval for the Environmental Impact Assessment (EIA) by the end of the year [24][36]. - Solaris Resources is exploring various funding avenues for future project phases, including joint ventures and traditional bank debt [40]. - The management team is focused on maximizing shareholder value and de-risking the project through strategic planning and execution [25][39]. Conclusion - Solaris Resources is well-positioned to capitalize on the growing demand for copper with its Warintza project, which boasts strong financial metrics, a significant resource base, and a commitment to social and environmental responsibility [2][25][43].

Summary of Key Points from Copper Expert Call with SMM Industry Overview - **Industry**: Copper Industry in China - **Date of Call**: October 23, 2025 - **Participants**: Mr. Ye Jianhua, Chief Copper Analyst at SMM Key Takeaways Copper Price Outlook - SMM indicates that the downstream sector is inclined to restock as copper prices in China have decreased to Rmb82-83k/t due to low inventory levels [1][2] - The average copper price is projected to be Rmb83.5-84k/t in 2026E, compared to Rmb80.5k/t in 2025E, which is considered conservative given the downstream pushback [1][2] - Spot prices could potentially reach approximately Rmb90k/t [1][2] Supply and Demand Dynamics - Global copper concentrate output is expected to increase by over 600kt YoY in 2026E [3] - China's copper cathode output is anticipated to rise by 1.3-1.35 million tonnes (mnt) YoY in 2025E and by 600-620kt in 2026E, with limited production cuts expected [3] - Both global copper cathode supply and consumption are projected to grow by 3-3.5% YoY in 2026E, despite tight supply conditions [3] Recycling Copper Policy - Crude copper capacity from scrap is primarily located in Jiangxi and Anhui provinces, affected by regulatory concerns [4] - The output impact from recycling copper products was estimated at 50-60kt in August and 20kt per month in September and October due to policy uncertainties [4] Consumption Trends in China - Copper consumption in China was weak in September and October 2025, particularly in the power segment and home appliances, attributed to high copper prices [5] - Negative YoY growth in copper consumption is expected for September-October 2025 due to a high base in Q4 2024 [5] International Market Dynamics - Overseas copper traders are showing willingness to purchase copper amid concerns over production cuts in international smelting capacity [5] - SMM expects continued shipments of copper to the US market due to the premium of Comex copper prices over LME [7] Additional Insights - The transition from aluminum to copper in power and home appliances is expected to be slow despite high copper prices, due to low fault tolerance [8] - Global copper demand from the data center industry is projected to reach 500-600kt in 2025E, with an increase of 250-300kt YoY in subsequent years [9] Conclusion The copper industry in China is experiencing a complex interplay of price dynamics, supply and demand shifts, and regulatory impacts. The outlook suggests cautious optimism with potential price increases, but challenges remain in consumption and recycling policies.

Global Copper Mine Output - Global copper mine output is projected to grow by 2.1% in 2025 to 23.4 million tonnes, up from 22.9 million tonnes in 2024, primarily due to output declines in Australia and Indonesia [1] Regional Contributions to Growth - Zambia is expected to deliver the largest contribution to growth in 2025, with output projected to rise by 19.2% to 937.5 kilotonnes, driven by the turnaround of ZCCM Investment Holdings' Mopani mine [2] - In Mongolia, the ramp-up of the Oyu Tolgoi underground mine will underpin growth and provide significant medium-term contributions [3] - Peru's output is expected to increase to 360-400 kilotonnes in 2025, up from 322.9 kilotonnes in 2024, due to higher output from China Minmetals' Las Bambas complex and the commissioning of the Chalcobamba pit [3] - The DRC's output will rise with capacity expansions at CMOC's Tenke Fungurume and Kisanfu projects, along with progress in the Heshima Hydropower Project [4] - Chile, holding a 23% share of global copper output in 2024, will see a modest 2% increase in output in 2025 as key operations recover [4] Production Challenges - Canada will benefit from improved grades at Teck Resources' Highland Valley Copper mine, but growth will be partially offset by planned lower production in Indonesia and Australia, where combined output is expected to fall from 1.8 million tonnes in 2024 to 1.5 million tonnes in 2025 [5] - In Indonesia, output at PT Freeport Indonesia's Grasberg Block Cave mine is set to decline due to lower ore grades and reduced operating rates, with production disrupted in September 2025 [6]

Group 1: Supply Forecast Changes - Goldman Sachs has lowered its global copper supply forecast for 2025 and 2026 due to disruptions at the Grasberg mine in Indonesia [1] - The bank estimates a potential loss of 525,000 metric tons of copper supply, leading to a reduction of 160,000 tons in the second half of 2025 and 200,000 tons in 2026 [3][9] - Grasberg's production is expected to decline by 250,000 to 260,000 tons in 2025 and by 270,000 tons in 2026 [4] Group 2: Impact on Freeport McMoRan - Freeport McMoRan has declared force majeure and halted mining activities to prioritize the rescue of trapped workers, with two bodies recovered so far [2] - The company anticipates very low production in the fourth quarter of 2025, with operations potentially restarting next year [5][6] - Grasberg accounts for half of Freeport's proven reserves and 70% of its projected copper and gold output through 2029, leading to a share price drop of over 21% since the update [7] Group 3: Market Implications - The disruption has shifted the global copper market from a projected surplus of 105,000 tons in 2025 to a deficit of 55,500 tons, while 2026 is expected to remain in a small surplus [8] - Goldman Sachs revised its estimates for global mine production growth for 2025 to 0.2%, down from 0.8%, and for 2026 to 1.9%, down from 2.2% [9] - The supply risks support Goldman's bullish outlook on copper prices, reaffirming a target of $10,750 per ton by 2027 [9] Group 4: Price Forecasts - Goldman sees upside risks to the December 2025 LME price forecast of $9,700 per ton, with potential prices in the $10,200-$10,500 range [10] - Current contracts are priced at $10,336 per ton, reflecting a 3% increase on the day [10]

Summary of Copper Industry Conference Call Industry Overview - The conference call focused on the copper mining industry, discussing production, inventory dynamics, and market outlook. Key Points Production Insights - Major copper miners reaffirmed their full-year production guidance for FY 2025, although some, including Freeport-McMoRan (FCX) and Teck Resources (TECK), have trimmed their forecasts. Others like Anglo American (AAL) and Glencore (GLEN) need to significantly increase production to meet their guidance [1] - In Q2 2025, copper production across major producers increased by approximately 6% quarter-over-quarter and 4% year-over-year, with a 2.5% year-over-year increase for the first half of the year [1] - Supply growth is expected to be constrained at around 2% in 2025, with notable production increases from Escondida (up 20% in 1H) but a moderation expected in 2026 [1] Inventory Dynamics - U.S. imports of refined copper surged by approximately 560,000 tons (190%) year-to-date compared to the previous year, and up 500,000 tons (150%) against the five-year average [2] - Despite increased imports, the Comex inventory build only rose by 150,000 tons year-to-date, indicating that much of the increased imports may have been accumulated as unreported inventory [2] - LME inventories fell by about 180,000 tons (65%) from January to June but have started to recover, increasing by 65,000 tons since the end of June [2] Tariff Impacts - President Trump's announcement on July 31 regarding tariffs on copper semis led to a significant drop in the COMEX premium, which could result in re-exporting built-up copper inventories if the COMEX trades at a discount to LME [3] - A material decline in U.S. imports is anticipated, which may increase supply to China and Europe, potentially raising LME and SHFE inventories in the near term [3] Disruptions and Mine Updates - El Teniente, a major underground copper mine, faced a fatal tunnel collapse on July 31, leading to a temporary suspension of operations. This incident is expected to reduce copper concentrate supply by approximately 30,000 tons per month [4] - Although operations are set to resume, production rates are expected to be lower for the remainder of 2025 and potentially into 2026 [4] Market Outlook - The medium-term outlook for copper remains bullish, but near-term caution is advised due to risks associated with U.S. tariff unwinding [5] - Recent downgrades were made for FCX, Southern Copper Corporation (SCCO), and Lundin Mining Corporation (LUN) to Neutral, while KGHM was downgraded to Sell. Conversely, ANTO, AAL, and Zijin are still considered good buys [5] Additional Insights - The report highlights that visible copper inventories are currently around 0.5 million tons, which is below the average levels of 0.75 million tons from 2010 to 2020, indicating a tight supply situation [32] - The seasonal nature of copper inventories in China was noted, with typical increases in Q1 and draws through Q2 to Q4 [34] Conclusion - The copper industry is experiencing a complex interplay of production challenges, inventory dynamics, and tariff impacts, which are shaping the market outlook. Investors should remain vigilant regarding these factors when considering investment opportunities in the sector.

Investment Rating - The report maintains a cautious outlook on copper prices, forecasting a decline towards $9,100/mt in Q3 2025 before stabilizing around $9,350/mt in Q4 2025 [2][4]. Core Insights - The tightening of copper fundamentals in 1H25 is attributed to two main factors: increased US imports ahead of potential tariffs and front-loaded demand from China [2][4]. - The report anticipates a payback in 2H25 from these dynamics, leading to a more cautious stance on copper prices for the remainder of the year [2][4]. - Visible copper inventory is described as significantly dislocated and imbalanced, rather than exceptionally tight globally [2][5]. - The US is projected to import approximately 430 kmt of excess refined copper in 1H25, which is expected to lead to a substantial inventory build [2][11]. - The report expects a multi-month de-stocking cycle in the US following the announcement of copper tariffs, which will shift supply dynamics towards Asia [2][13]. - Chinese copper demand growth has been robust at around 7% year-on-year, but is expected to slow in 2H25 due to various headwinds [2][14]. - The report highlights a potential decline in demand from the air conditioning and white goods sectors, as well as a significant slump in solar demand, which could lead to flat or slightly negative overall demand growth in China for 2H25 [2][19][24]. - Despite the anticipated unwind of tightening factors, overall copper supply growth remains constrained, supporting prices above $9,000/mt [2][25]. Summary by Sections US Copper Imports and Tariffs - The report expects a 25% tariff on US imports of refined copper and copper products to be announced by the end of July 2025 [2][27]. - Following the tariff announcement, US imports are expected to drop significantly, leading to a shift in trade flows towards Asia [2][36]. Chinese Demand Dynamics - Chinese copper demand growth is projected to be around 3% for the full year 2025, with a significant slowdown expected in 2H25 [2][14]. - The report notes that while grid demand will remain strong, other sectors such as housing and solar are likely to face challenges [2][19][24]. Price Forecasts - The report provides a quarterly price forecast for copper, estimating $9,100/mt for Q3 2025 and $9,350/mt for Q4 2025 [2][49]. - Overall, the report suggests that absent a severe downturn in the macroeconomic environment, copper prices will remain supported despite the anticipated corrections [2][25].