I don't think it's a case of which will be better, I think both stocks will perform well, and one of EQX's projects will benefit from SDL's rail line if SDL can lock in finance. SDL's success will help EQX, there is little doubt.
I purchased some EQX shares yesterday morning for $2.13 upon open, and I'm glad I did. I'm very comfortable investing in both SDL and EQX. The DOW performed fantastically last night which should translate to a green day on the ASX overall you would have thought.
EQX is in a very good position. I would imagine that the company will focus on confirming their DSO resource, then they will move on to obtaining finance for their initial CAPEX costs, which should be relatively low compared to SDL. It would not surprise me if EQX decided on mining a low amount of DSO per annum to begin with, and use the free cash flow generated from sales to then expand their operation. For instance, the rail line can currently handle 11mtpa. EQX could decide to begin by mining 5-10mtpa DSO, and use the free cash flow to upgrade the rail/port to be able to handle 20mtpa. That's just an example. This would protect shareholder value by limiting the initial CAPEX costs (and therefore the need to raise huge amounts of funds through equity), and using the company's own cash flows to expand their operation.
Thoughts?
EQX Price at posting:
$2.33 Sentiment: Buy Disclosure: Held
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