This morning SolGold (LON: & TSX: SOLG) has announced that it has entered into syndication with Franco-Nevada (70%) and Osisko Bermuda (30%) to provide $750m project advancement funding for its world-class Cascabel Project in Ecuador.
The Ecuadorian government has shown strong support for the Cascabel Project, recognising its potential to significantly boost the Ecuadorian economy.
The Cascabel Project represents the most significant investment in Ecuador’s mining history.
Last month the company concluded an Exploitation Contract with the government which develops the autonomy and freedom of the company to make its commercial decisions concerning technical design of the mine, investment amount, and production capacity.
The planned mine is based on a ‘Proven and Probable’ ore reserve of ~540mt at an average grade of 0.60% copper, 0.54g/t gold and 1.6g/t silver containing 3.2mt of contained copper, 9.4moz of gold and 28moz of silver with 85% of the reserve tonnage falling within the high confidence, ‘Proven’ classification of the CIM reporting codes.
The ore reserves are contained within 3.01bn tonnes of ‘Measured and Indicated’ resources at an average grade of 0.35% copper, 0.28g/t gold and 0.94g/t silver (reported as 0.52% on a copper equivalent basis).
It is considered that the conversion of at least some of these resources, and the possible identification of additional resources during the mining, could trigger the need to extend the agreement beyond the initial 33-year term.
SolGold plans to initiate the next phase of Project advancement immediately, focusing on geotechnical drilling of the tailings storage facility, additional metallurgical testing, reserves definition at the Tandayama-Ameríca deposit, hydroelectric power opportunities, plant location, and mine site design and layout, as well as securing necessary land access rights for infrastructure and commencing work on the Feasibility Study.
On the back of this morning’s good news, the group’s shares are up 16% at 10.30p.