Thursday, March 07, 2024

SolGold soars on $3.2bn investment, largest in Ecuador history


The Cascabel copper-gold project is one of the most ambitious mining developments in Ecuador. (Image: Alpala camp. Screenshot from SolGold corporate video 2017.)

Shares in Ecuador-focused SolGold (LON, TSX: SOLG) shot up more than 23% on Wednesday after the company announced a $3.2 billion investment from the country’s government in its flagship Cascabel copper-gold project in coming years.


The deal is the largest mining investment in Ecuador’s history, according to SolGold, and it is separate from the government’s already committed $311 million for the project, included in the current Investment Protection Agreement (IPA) for Cascabel.

The complementary IPA, inked at the at the Prospectors and Developers Association of Canada (PDAC) convention in Toronto, highlights the scale and importance of the project, SolGold said in the statement.

“[This deal] not only reinforces the protections for our key investment in Ecuador but also symbolizes a deepening of our relationship with the Ecuadorian State,” chief executive Scot Caldwell said.

SolGold released in February a new pre-feasibility study (PFS) for Cascabel in which it managed to slash upfront costs. Pre-production capital used for initial mine development, first process plant module and infrastructure is now estimated at $1.55 billion, compared to $2.75 billion from the PFS issued in April 2022.

According to SolGold, the size of the entire resource indicates the mine’s potential to be a multi-generational asset, potentially one of the 20 largest copper-gold mines in South America. Mine construction is set to start in 2025.

Investors have been skeptical of SolGold management’s ability to deliver the project to its potential. The company’s share price has halved over the past year, while the miner has had to cut spending to stay afloat, prompting a strategic review of its assets.

SolGold’s shares were trading 23.07% higher in London mid-afternoon to 8.13p. Year-to-date, however, the stock is down more than 18%. The company’s current market capitalization is £243 million (about $310m).


Ecuador enters mining investment deals with Adventus and Atico

The agreement lays the groundwork for the progression of the Condor mining
 project.

March 6, 2024

Adventus will invest at least $100m (C$135.83m) in the Condor project, which includes $48m during the period 2024–38.
 Credit: Evgeny_V via Shutterstock.com.

Adventus Mining has reached an investment agreement (IA) with the Government of Ecuador for the development of the Condor mining project in south-eastern Ecuador.

This agreement lays the groundwork for the project’s progression and the negotiation of an Investment Protection Agreement (IPA), which will be crucial for future construction and operations if the project advances to that stage.

The IA represents a mutual commitment between Adventus and the Ecuadorian Government, through the Ministry of Production, Foreign Trade, Investment and Fisheries, to discuss the terms for a future IPA.

The expected IPA will detail the project’s scope, investment commitments, timelines and responsibilities, as well as the collaborative effort to secure all necessary approvals, licences and permits under Ecuadorian law and international standards.

As per the agreement, Adventus will invest at least $100m in the Condor project, which includes $52m of historical expenditure from 2010 to 2023 and a future investment of $48m for the period 2024–38.

The IA also accounts for any additional investments by Adventus during this period, which would be protected under the future IPA.

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