Ecuador-focused SolGold (LON, TSX: SOLG) said on Thursday its chief executive and managing director, Darryl Cuzzubbo, had left the company effective immediately, after less than a year in the top job.
The former BHP executive’s departure comes just two days after the company unveiled a $50 million royalty financing deal to advance its giant Cascabel copper-gold project in Ecuador.
Cuzzubbo took the reins last December after SolGold’s lengthy search to replace co-founder Nick Mather, who was handed a strong rebuke at the company’s annual meeting with nearly half (44.7%) of shareholders voting against his reappointment.
SolGold, backed by BHP (ASX: BHP) and Newcrest (ASX: NCM), had sparred with the two large shareholders over funding for its flagship project under Mather’s guidance.
The funding deal announced on Monday has reportedly reignited criticism from shareholders, including the two Australian miners.
Osisko agreed to provide the $50 million in funding in return for 0.6% net smelter return royalty. The move gives Cornerstone, which has a 15% stake in Cascabel, an increased interest in SolGold to 20%, diluting BHP and Newcrest holdings to slightly over 10%.
Newcrest Mining, which has a 13.5% stake in SolGold labelled the miner’s royalty funding deal as “expensive” and “negative”, The Australian reported.
BHP chief executive Mike Henry told the same newspaper after the group’s general meeting in Perth on Thursday that SolGold had come up with a “disappointing high-cost” finance option. BHP has a 13.6% interest in SolGold.
SolGold has also said it holding talks with potential partners in Cascabel as part of a strategic business review kicked off after acquiring in October Canada’s Cornerstone Capital Resources (TSX-V: CGP) to secure a 100% ownership of Cascabel.
The company noted it had appointed non-executive director Scott Caldwell, who has held a number of senior executive roles, as interim CEO until a permanent replacement has been found.
The Cascabel project, located in the Imbabura province of northwest Ecuador, is one of the most ambitious mining projects in a country that is keen to develop mineral resources to spur its sluggish economy.
According to the pre-feasibility study published in April, 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.
This means the asset has the potential to become one of the 20 largest copper-gold mines in South America.
Alpala, the largest deposit found at Cascabel so far, has measured and indicated resources of 2.7 billion tonnes grading 0.53% copper-equivalent (0.37% copper, 0.25 grams gold per tonne, and 1.08 parts per million silver) for 9.9 million tonnes of contained copper, 21.7 million oz. gold and 92.2 million oz. of silver.
During the first 25 years of mining, Cascabel is expected to have an average annual production of 207,000 tonnes of copper, 438,000 ounces of gold and 1.4 million ounces of silver.
Over the last two years, Ecuador has attracted a flurry of interest from big miners looking to increase their exposure to copper. The highly conductive metal is in demand for use in renewable energy and electric vehicles, but big, new deposits are rare.
It’s estimated that the global copper industry needs to spend more than $100 billion to build mines able to close what could be an annual supply deficit of 4.7 million tonnes by 2030.
