Equity Analysis /
United Kingdom

GB : SolGold - Election result clears major risk hurdle

    Tom Price
    Tom Price

    Analyst - Strategy, Accounting and Sustainability

    Max Kaye
    Ben Davis
    13 April 2021
    Published by

    The victory of Guillermo Lasso in the Ecuador elections derisks the SolGold investment case and materially increases the likelihood of a takeover bid in our view. Not only was Lasso the pro foreign direct investment candidate, which should get potential investors off the fence, but the clear win allows for a smooth transition. Combined with encouraging progress on the PFS re-scoping and exploration at Porvenir, we are lowering the discount to 20% from 30% on our valuation. This raises the price target to 44p or just 2.6 weeks of BHP’s spot FCF generation.