SolGold advances plan to sell flagship Ecuador copper project

SolGold (LON: SOLG) said on Wednesday it is making headway with the potential sale of its flagship Cascabel copper-gold project in Ecuador, as it has held talks with more than 20 “highly credible” interested groups.

The company, which merged last year with Cornerstone Capital Resources to consolidate 100% ownership of Cascabel, said that at least five potential suitors have already completed site visits. It added there were a number of follow-up visits being scheduled.

“External groups evaluating the project are being very diligent in their review as they progress through various stages in their internal processes,” chief executive Scott Caldwell said in the statement.

“In parallel, we continue to advance and de-risk Cascabel to position it as a turnkey asset,” he said.

SolGold noted that work plans for 2024 are now funded, with no additional financing required in the near-term, thanks to a $86 million combined investment from Osisko Gold Royalties (TSX, NYSE: OR) and Jiangxi Copper.

Caldwell reported that, since his appointment to the top job nearly a year ago, he had implemented a “hard reset” for the organization. Caldwell and Solgold’s chief financial officer, Chris Stackhouse, have tied their compensation to higher share prices and both have made personal investments in the company’s shares.

The miner’s headcount has reduced by about 70% since the 2022 financial year. It has now 282 employees, down from 894.

On the ground

Another key move was Caldwell’s relocation to Ecuador to lead operations on the ground.

Shortly after, the company secured a 25-year license renewal for the project, located in the Imbabura province of northwest Ecuador. 

SolGold said its current top priority is to continue advancing its ongoing strategic review, which include the potential sale of Cascabel and/or SolGold’s Ecuadorian exploration portfolio.

According to the pre-feasibility study (PFS) published in April last year, annual production will average 132,000 tonnes of copper, 358,000 ounces of gold and 1 million ounces of silver during Cascabel’s 55-year life-of-mine.

The company is working on an updated PFS, which it will published by the end of next year’s first quarter. It’s expected to demonstrate a lower risk path for Cascabel with reduced capital intensity.