Executive Summary / Key Takeaways

• Solaris Resources Inc. ($SLSR) is strategically positioned to capitalize on surging global copper demand, driven by green energy and artificial intelligence, through its flagship Warintza Project in Ecuador. The project boasts a significant resource base and a compelling operational cost advantage due to favorable local conditions.
• The company has made substantial progress in de-risking Warintza, securing critical social licenses through landmark agreements with Indigenous communities and bolstering its financial runway with a US$200 million non-dilutive financing package from Royal Gold (RGLD) and a strategic investment from Zijin Mining Group (ZIJMF).
• Despite being in a pre-revenue exploration phase, characterized by significant R&D expenses and net losses, Solaris is advancing key milestones, including an updated Mineral Resource Estimate and Pre-Feasibility Study targeted for Q3 2025, which are expected to unlock substantial future value.
• Solaris differentiates itself from larger, diversified mining giants through its focused approach on high-potential, low-capital-intensity assets and strong community engagement, though it faces inherent risks associated with project development, commodity price volatility, and geopolitical factors.
• Analyst consensus points to significant upside potential for SLSR shares, with average price targets suggesting a substantial increase from current levels as the Warintza project progresses towards a final investment decision.

The Copper Crucible and Solaris's Vision

The global economy stands at the precipice of a profound transformation, fueled by the relentless march of green energy initiatives and the explosive growth of artificial intelligence. Both megatrends are creating an unprecedented surge in demand for critical raw materials, with copper emerging as a cornerstone of this new industrial era. The World Bank forecasts copper demand to grow by 50% by 2030, while BloombergNEF projects global copper demand to rise from 26.6 million tons in 2025 to 35.3 million tons in 2035, with clean energy industries accounting for a significant portion of this growth. AI data centers alone are projected to create an additional demand of approximately 400,000 tons annually, requiring 3-8 times more copper per square meter than traditional data centers due to enhanced power and cooling needs. This backdrop of intensifying demand and anticipated supply deficits, projected to exceed six million tons by 2035, sets a compelling stage for companies focused on new copper supply.

Into this dynamic landscape steps Solaris Resources Inc. (NYSE: SLSR), a mineral exploration and development company primarily focused on copper, molybdenum, gold, lead, zinc, and silver. Incorporated in 2018 as Solaris Copper Inc. and rebranded in December 2019, Solaris has strategically built a portfolio of mineral interests across Ecuador, Chile, Peru, and Mexico. Its flagship Warintza Project in southeastern Ecuador has become the focal point of its ambitious strategy to deliver a new, globally significant copper supply.

Solaris positions itself as a focused explorer with high-potential assets, contrasting with the diversified portfolios of industry giants like Freeport-McMoRan Inc. (FCX), Rio Tinto Group (RIO), BHP Group Ltd. (BHP), and Teck Resources Ltd. (TECK). While these larger players benefit from extensive operational scale and established revenue streams, Solaris aims to leverage its agility and specific project advantages to carve out a significant niche. The company's overarching strategy centers on de-risking its projects through rigorous exploration, securing social and environmental licenses, and strategically financing its path to production.

The Warintza Advantage: A Differentiated Operational Edge

Solaris's core investment thesis is deeply rooted in the unique characteristics and strategic development of its 100%-owned Warintza Project. While not a "technology" in the traditional sense of a proprietary chemical process, Warintza's differentiated operational advantage stems from a confluence of favorable geological, geographical, and infrastructural factors within Ecuador. Daniel Earle, President and CEO of Solaris, highlights that the capital cost to bring Warintza into production could be "anywhere from a half to a third of the cost of the competing jurisdictions," with capital intensity in Ecuador "under $15,000 a ton." This significant cost advantage is attributed to Ecuador's status as a US dollar economy, coupled with low-cost labor, readily available and inexpensive hydroelectric power, well-developed infrastructure (highways and bulk ports for export), low elevation, and an abundant supply of freshwater. These elements collectively form a powerful operational moat, enabling Solaris to pursue a potentially lower-cost development pathway compared to many global copper projects.

The company has been aggressively advancing Warintza through a comprehensive development roadmap. Between January 2024 and February 2025, Solaris completed an extensive 82,000-meter infill drilling campaign aimed at upgrading a substantial portion of inferred resources to measured and indicated categories. This drilling has expanded known mineralization to the north, northwest, and southeast, suggesting a larger resource base. An updated Mineral Resource Estimate (MRE), which for the first time will include resources from Warintza West, is targeted for Q3 2025. Concurrently, a Pre-Feasibility Study (PFS) is also on target for publication in Q3 2025, providing critical economic and technical parameters for the project. The Final Technical Environmental Impact Assessment (EIA) has been submitted and is currently under government review, with technical approval on target for mid-2025. These milestones are crucial for de-risking the project and demonstrating its economic viability to potential investors and partners.

Building the Foundation: Strategic Partnerships and Social License

Beyond the technical aspects, Solaris has demonstrated a strong commitment to establishing a robust social license, a critical differentiator in the mining industry. On September 11, 2025, Solaris achieved a landmark agreement with the Pueblo Shuar Arutam organization (PSHA), completing formal partnerships with all Indigenous organizations surrounding the Warintza Project. This builds upon existing Impact and Benefits Agreements with the host Shuar Centres of Warints and Yawi, first signed in 2020 and updated in 2022 and 2024. This collaborative approach, emphasizing transparency, dialogue, and inclusion, is foundational to the company's "Participatory Mining" model, which seeks to democratize mining through equitable relationships between communities, government, and the company. Following a successful site visit by government officials and community leaders in July 2025, the Free, Prior and Informed Consent (FPIC) process is expected to commence in the coming months, a formal requirement under Ecuadorian law for major resource developments. The re-election of President Daniel Noboa further reinforces a supportive policy environment for mining in Ecuador.

To fund these extensive de-risking activities and advance Warintza towards a final investment decision, Solaris secured a US$200 million non-dilutive financing package from Royal Gold in May 2025. This arrangement, comprising a gold stream and a net smelter return royalty, provided immediate access to US$100 million, earmarked to repay a senior debt facility and ensure liquidity for project advancement. The financing package is restricted to the Warintza cluster, preserving Solaris's exposure to significant exploration upside elsewhere. Additionally, a C$130 million strategic investment from Zijin Mining Group, which gave Zijin a 15% stake, was described by CEO Daniel Earle as "transformational" for the business, enabling a more aggressive pursuit of the company's vision.

Financial Performance: The Exploration Phase Reality

As a mineral exploration and development company, Solaris Resources is currently in a pre-revenue stage, which is reflected in its financial statements. For the year ended December 31, 2024, the company reported no revenue. This is typical for companies focused on developing large-scale mining projects, where significant capital is expended before commercial production begins.

Solaris reported a net loss of -$77.02 million in 2024, an increase from -$41.01 million in 2023 and -$58.66 million in 2022. This expanding loss is primarily driven by substantial investments in exploration and development, categorized as research and development (R&D) expenses, which surged to $61.51 million in 2024 from $30.95 million in 2023 and $51.49 million in 2022. Operating expenses also increased to $72.98 million in 2024, up from $41.17 million in 2023. These figures underscore the capital-intensive nature of bringing a major mining project online.

The company's liquidity position saw its cash and cash equivalents decrease to $32.31 million at the end of 2024 from $39.44 million in 2023. However, the US$200 million Royal Gold financing, with US$100 million immediately available, significantly bolstered the company's liquidity in May 2025, providing the necessary runway for de-risking activities.

Total liabilities increased significantly to $66.48 million in 2024 from $36.39 million in 2023, with total debt rising to $49.64 million from $29.45 million over the same period. Notably, total stockholders' equity turned negative at -$17.20 million in 2024, reflecting accumulated losses typical of an early-stage growth company.

When comparing Solaris's financial metrics to established producers like Freeport-McMoRan Inc., Rio Tinto Group, BHP Group Ltd., and Teck Resources Ltd., the contrast is stark. These diversified mining giants generate billions in revenue and operate with positive net incomes and robust cash flows. For instance, Freeport-McMoRan's copper segment alone is expected to generate $17 billion in revenues for FY2024, representing 53% of its total revenues. Rio Tinto's iron ore segment is projected to account for 50% of its $55 billion in total revenues for FY2024. Solaris's current financial profile reflects its developmental stage, where investment in future production outweighs immediate profitability. Its Price-to-Book ratio of -28.66x further highlights its negative equity, making traditional valuation metrics like P/E and P/S ratios inapplicable.

Competitive Dynamics: A Niche Player's Strengths and Weaknesses

Solaris Resources operates within a highly competitive global mining industry dominated by a few large, diversified players. Its primary direct competitors include Freeport-McMoRan Inc., Rio Tinto Group, BHP Group Ltd., and Teck Resources Ltd. These companies possess vast operational scales, diversified portfolios across multiple commodities and geographies, and significant financial resources.

Solaris distinguishes itself through a focused strategy on high-potential, early-stage projects like Warintza, which it owns 100%. This allows for greater control over project timelines and decision-making, potentially enabling faster innovation in site development compared to the more bureaucratic operations of its larger rivals. The company's emphasis on strong community engagement and its "Participatory Mining" model also provides a unique approach to securing social license, which can be a critical competitive advantage in challenging jurisdictions. As CEO Daniel Earle noted, Warintza's potential for significantly lower capital costs due to Ecuador's favorable operating environment (low-cost labor, power, and infrastructure) provides a tangible competitive edge, potentially allowing for production at a fraction of the cost of competing jurisdictions.

However, Solaris's smaller scale and pre-revenue status present inherent vulnerabilities. It lacks the diversified revenue streams of companies like BHP, which operates across iron ore, copper, and coal, or Rio Tinto, which has significant iron ore, aluminum, and copper operations. This makes Solaris more susceptible to commodity price volatility and regulatory delays, which can have a more pronounced impact on its financial performance. While larger players can absorb such shocks through their broader portfolios, Solaris's concentrated focus means its success is more tightly linked to the successful development of Warintza. Barriers to entry in the mining sector, such as high capital requirements and complex regulatory approvals, also favor established giants who can better navigate these hurdles.

Indirect competitors, including metal recycling firms and developers of synthetic materials, pose a longer-term threat by potentially reducing demand for primary mined metals. While this impacts the entire industry, Solaris, with its smaller scale, could be more vulnerable to such disruptions compared to diversified players.

Outlook and Value Catalysts

The immediate outlook for Solaris Resources is defined by critical de-risking milestones at its Warintza Project. The anticipated publication of an updated Mineral Resource Estimate and the Pre-Feasibility Study in Q3 2025 are expected to provide a clearer picture of the project's scale and economic potential. Following the PFS, the company plans to transition to a Bankable Feasibility Study, a crucial step towards a final investment decision.

The recent US$200 million financing from Royal Gold, with tranches tied to the publication of the PFS and EIA technical approval, provides a clear financial pathway for these near-term objectives. The strategic investment from Zijin Mining Group further strengthens the company's financial position and commitment to expanding its exploration and development programs.

Wall Street analysts project an average price target of $12.00 for SLSR, with forecasts ranging from $11.00 to $13.00, suggesting a potential upside of 99.67% from a recent share price of $6.01 by August 29, 2026. Another analyst consensus indicates an average price target of $10.83, representing a 70.28% increase from a closing price of $6.36. One analyst even forecasts Solaris Resources's revenue for 2029 to be $45.3 billion, signaling significant long-term growth expectations if Warintza comes online. The company's inclusion in the S&P/TSX Global Mining Index on June 13, 2024, is also expected to enhance institutional investor exposure and liquidity.

Risks to the Thesis

Investing in Solaris Resources, like any exploration and development company, carries significant risks. The long timeframe, potentially five years or more, to bring a project like Warintza into production exposes investors to prolonged capital expenditure without immediate returns.

Key risks include permitting delays and commodity price volatility. While copper demand is robust, prices can fluctuate due to global economic conditions, trade policies, and geopolitical events. The Warintza Project's location in Ecuador, described as a "challenging country," introduces political and sociological risks. Although Solaris has made significant strides in community engagement, historical opposition from Indigenous groups to mining in their territory, as highlighted by past complaints, underscores the ongoing need for careful social license management.

Financially, Solaris faces risks related to its negative shareholders' equity and its unprofitability, with no forecast to become profitable over the next three years. The company's ability to continue as a going concern is dependent on the successful execution of its business plan and its capacity to raise additional capital if needed, despite recent financings. Operational risks, such as variations in grade or recovery rates, unexpected costs, labor disputes, and environmental challenges, are also inherent in large-scale mining projects.

Conclusion

Solaris Resources Inc. presents a compelling, albeit high-risk, investment opportunity for those seeking exposure to the burgeoning demand for copper. The company's flagship Warintza Project in Ecuador is underpinned by a significant resource base and a distinct operational advantage derived from the region's low capital intensity. Solaris's strategic execution, marked by successful community partnerships, substantial de-risking efforts, and non-dilutive financing, positions it as a promising challenger in an industry poised for growth.

While the company's pre-revenue financial profile and inherent development risks demand careful consideration, the anticipated milestones of an updated Mineral Resource Estimate and Pre-Feasibility Study in Q3 2025 serve as critical catalysts. Should these studies confirm the robust economics and operational viability of Warintza, Solaris could unlock substantial value, transforming from a promising explorer into a significant future copper producer. The long-term investment thesis hinges on the company's continued ability to navigate complex social and environmental landscapes, manage its capital effectively, and ultimately deliver on the promise of its differentiated, low-cost copper asset in a world increasingly hungry for the red metal.