SO4 has secured a funding package on favourable terms for the Lake Way project of US$150m from Taurus Fund Management as well as an additional A$7m equity injection from Fidelity. The addition of high-quality investors such as Taurus and the continued support of Fidelity is a strong validation of the Lake Way project and the SO4 management team. In our view, the Lake Way project funding has now been de-risked, and the next key catalyst is the release of the BFS, which is expected later this year. We updated our valuation and assumed a 90:10 debt-equity ratio, and as a result, our per-share valuation for SO4 has increased from $1.15 p/s to $1.34. We maintain our SPEC BUY recommendation with a $1.34 price target.
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