BHP Group PLC (LON: BHP) have announced on Monday morning that they will increase their stake in SolGold Plc (LON: SOLG).
SolGold PLC is an Australian gold and copper mining company. The firm has specialities in exploration, mine development, investment, finance and law.
Only a few days ago, BHP announced two new senior appointments which looked to turn around the companies mixed performance in financial 2019.
BHP is a FTSE100 (INDEXFTSE: UKX) listed firm, and the interest shown into SolGold has caused shares to rally.
Shares of SolGold rallied 7.25% to 21p on Monday. 25/11/19 10:32BST.
SolGold’s headline project is the Alpala deposit on the Cascabel project in Ecuador, with a pre-feasibility study due to be completed by the end of the first quarter of 2020.
BHP has signed up for a further 77 million SolGold shares at 22.15 pence each, giving a total approximate investment of £17.1 million.
BHP will hold 282.7 million SolGold shares after the deal, making it marginally the biggest shareholder with a 14.7% stake.
BHP have also been issued with 19.3 million share options exercisable at 37p within five years.
“SolGold is pleased to welcome BHP into a further position in the company. SolGold’s view is that the agreement endorses its view of SolGold’s commanding Ecuadorean copper and gold exploration footprint, and in particular the robust Alpala deposit,” said SolGold Chief Executive Nick Mather on Monday.
Additionally, as well as BHP SolGold has a majority shareholder in Newcrest Mining Ltd (ASX: NCM).
The recent share purchases follow an unsuccessful attempt in late 2016 by BHP to buy a 10% stake in SolGold for $30 million.
BHP also had looked to take a 70% direct interest in the Cascabel project for a further $275 million, but this was rejected by SolGold.
This move comes at a good time for SolGold, and the investment will allow further expansion and development into new explorations.
Other firms in the mining industry have been busy, and shares have been volatile. Hochschild Mining (LON: HOC) have seen their shares plummet on Friday, after they cut their production guidance figures.