BHP could increase its SolGold stake, CEO says

SolGold Plc [SOLG-TSX, LSE] is in talks with financiers who are keen to invest in its Ecuadorian copper-gold prospects and mining giant BHP Billiton Ltd. [BHP-NYSE, BHPLF-OTCPK] could increase its stake in the company, Solgold’s CEO Nick Mather said Monday May 21, according to a report by Reuters News service.

News of these developments comes after Solgold released a Preliminary Economic Assessment for the Alpala copper-silver-gold deposit on its Cascabel Project in northern Ecuador.

According to the PEA, the project can produce an average of 207,000 tonnes of copper, 438,000 ounces of gold and 1.4 million ounces of silver in concentrates per year over the first 25 years of operations.

Pre-production capital expenditures are forecast at approximately US$2.4-US$2.8 billion. The PEA also foresees total capital expenditures, including life-of-mine sustaining Capex of US$10.1-US$10.5 billion, depending on the production scenario.

The company said a Pre-Feasibility Study is expected to be completed in December 2019, with a Definitive Feasibility Study scheduled for completion at the end of 2020.

SolGold shares were unchanged Tuesday at 65 cents. They trade in a 52-week range of 31.5 cents and 76 cents. Australia’s Newcrest Mining Ltd. [NCM-ASX] is SolGold’s biggest investor with 15.3%. BHP holds 11.2%.

SolGold is a copper-gold exploration and development company with assets in Ecuador, Solomon Islands and Australia.

The company recently said drilling at its Cascabel copper-gold project in the country’s high north has revealed previously unknown mineralization, further increasing the potential size of one of the biggest copper discoveries in recent years.

SolGold also recently announced its intention to bid for all the outstanding shares of Cornerstone Capital Resources Inc. [CGP-TSX; CTNXF-OTC; GWN-FSE], saying the key advantage of any Cornerstone takeover would be the consolidation of ownership in the Cascabel Project, which is 100%-owned by SolGold’s 85%-owned Ecuador subsidiary Exploraciones Novomining S.A. The remaining 15% is held by Cornerstone.

However, Cornerstone quickly dismissed the proposal, saying that owners of 50% of the company’s outstanding shares will not support the terms of the proposed offer.

The Cascabel Project is a porphyry copper-gold deposit located in the Imbabura province of northwestern Ecuador, which lies within the under-explored northern section of the richly endowed Andean Copper Belt.

The tenement is situated on the margin of the Eocene and Miocene metallogenic belts which are renowned for hosting some of the world’s largest porphyry copper and gold deposits, like the giant La Escondida Copper Mine in Chile, which is the world’s largest producer of copper and hosted within the same age host rocks as Cascabel.

To date, exploration activity has identified 15 potential porphyry centres at Cascabel, at Alpala Central, Alpala Northwest, Alpala Southeast, Hematite Hill, Alpala East, Alpala West, Alpala South, Moran, Trivinio, Carmen, Cristal, Aguinaga, Tandayama-America, and Parambas.

Back in January, 2019, Solgold released a NI 43-101 compliant technical report containing an updated resource estimate for the Alpala deposit.

According to the technical report, the Alpala mineral resource now stands at 2.0 billion tonnes grading 0.60% copper equivalent (at 0.2% copper equivalent cut-off) in the indicated category, and 900 million tonnes of 0.35% copper equivalent (at 0.2% copper equivalent cut-off) in the inferred category.

The contained metal content stands at 8.4 million tonnes of copper and 19.4 million ounces of gold in the indicated category and 2.5 million tonnes of copper and 3.8 million ounces of gold in the inferred category.