SLR had pre-released production and cash balance data earlier this month, hence the bulk of the 3QFY24 result was in line with our forecasts. AISC at Mt Monger were lower than we had expected, with Deflector AISC broadly in line. SLR looks on track to beat production guidance for both Mt Monger and Deflector, with group production forecast to come in 5% above the top end of the range. Drilling results at Sugar Zone provide some comfort that a re-start of the operation is becoming more likely. The timing for the Scheme meeting for the merger with RED 5 (RED AU, BUY, A$0.52 Price target) has been confirmed and the merger completion is set for 19 June 2024. We are upgrading our rating on SLR from HOLD to BUY, lifting our price target 13% to A$1.70 due to the improved earnings outlook and strength in spot gold prices.
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