Classification of Sphene Capital GmbH to Eloro Resources Ltd.

Are there two world class deposits at Iska Iska?

Further exploration drilling focusing on tin is planned to confirm recent findings of significant tin intersections at Eloro’s Iska Iska project. Should the discovery of a tin porphyry be confirmed, Eloro Resources would not only have one but two genetically related deposit types on the same property: a silver-zinc-lead dominant system and a high-grade tin system. Notwithstanding this potential, our valuation continues to be based solely on the shallow, higher-grade resource in the polymetallic domain, totalling 132 million tonnes at 1.11% Zn, 0.50% Pb, and 24.3 g Ag/t, as outlined in the NI 43-101 MRE published in October 2023. Applying current market prices and a P/NAV discount of 70%, which we consider reasonable, we calculate a net asset value-driven price target of CAD 12.40 per Eloro share. We therefore reiterate our Buy rating for the shares of Eloro Resources. We consider the current pullback in the company’s share price an interesting entry point for long-term investors, as it was caused, among other factors, by erratic analyst downgrades and misconceptions about the intrinsic value of the Iska Iska project. We highlight that our price target could increase further once the recently reported higher tin and silver grades have been included in a planned PEA.

Eloro Resources has discovered a high-grade tin intercept in its definition diamond drilling programme in the potential Santa Barbara starter pit area at the Iska Iska silver-tin polymetallic project in Bolivia. Tin mineralisation with a grade of 1.39% Sn over 33 m (from 339.80 m to 372.80 m) was discovered already in the first drill hole (“DSB-72”) completed in the domain. In the higher-grade zone featuring cassiterite veins within a well-mineralised breccia, individual 1.5m samples encompassing the veins returned tin values of 6.65%, 4.97%, 3.50% and 2.75%, respectively. It is remarkable, in our view, that in addition to these tin discoveries, high-grade silver mineralisation of 24.48 g Ag/t over 45.0 m (from 117.80 m to 162.80 m) was also intersected in the upper part of this hole.

Tin mineralisation is contained within a large intrusive breccia unit (TIB), measuring approximately 750 meters in length, 450 meters in width, and extending to a depth of at least 700 meters. Previous exploration drilling has identified several notable tin intercepts within this relatively underexplored breccia unit. The recently discovered high-grade tin mineralisation is described as visible coarse-grained, high-temperature cassiterite, potentially representing either an outcrop or an apophysis of a larger tin porphyry system at depth.