SolGold (TSX: SOLG), a miner focused on Ecuador, saw its shares soar by over 23% on 6 March 2024, after it pledged to pour US$3.2B into its Cascabel copper-gold project and related activities in the next few years.
The pledge has claimed top spot as the biggest mining investment ever made in Ecuador, considering it was an addition to an already existing US$311M commitment to the project, which was part of the current Investment Protection Agreement (IPA).
The company unveiled a new pre-feasibility study (PFS) for Cascabel in February, which showed a significant reduction in upfront costs. The initial capital needed for the mine development, the first process plant module, and the infrastructure is now estimated at US$1.55B, down from US$2.75B reported in the previous PFS.
Overall, the Cascabel project boasts indicated resources of 2.050Bt, containing 8.4Mt of copper and 19.4Moz of gold, along with inferred resources of 900Mt containing 2.5Mt of copper and 3.8Moz of gold.
CEO and president of SolGold Ecuador, Scott Caldwell, commented: “The complementary Investment Protection Agreement not only reinforces the protections for our key investment in Ecuador but also symbolizes a deepening of our relationship with the Ecuadorian State. President Noboa’s attendance and insightful speech at the PDAC convention were warmly welcomed by the mining community and underscores the significant support of his administration for responsible mining in Ecuador.”
The significant size of the resource suggests that the mine could last for generations, and potentially rank among the top 20 copper-gold mines in South America. The mine construction is expected to begin in 2025.
SolGold’s management has faced doubts from investors about its ability to realize the project’s potential, evident by the share price dropping by half in the past year, and the miner has had to slash spending to survive, leading to a strategic review of its assets.
Yet, the company prevailed, with shares up 23.07% in London in the mid-afternoon on 6 March 2024, trading at 8.13p.
