SolGold (TSX: SOLG; LSE: SOLG) announced Wednesday that certain investors, including China’s Jiangxi Copper (Hong Kong) Investment Co.. have agreed to purchase 180 million shares of the company at a price of US20¢ per share for gross proceeds of US$36 million.
Among the new investors, Jiangxi Copper is expected to purchase 155 million shares. Once the financing closes (subject to due diligence with timing expected next month), Jiangxi will own about 6.3% of SolGold’s ordinary share capital.
Commenting on the investment, SolGold’s interim CEO Scott Caldwell stated: “I am very pleased to have Jiangxi become an investor in SolGold. They are a highly accomplished mining company and more importantly, 100% aligned with SolGold in ensuring all stakeholders are treated respectfully and fairly.”
“This also clearly demonstrates another step forward on my previously announced commitment, to ensure the SolGold team works tirelessly to ensure shareholders are rewarded for funding this world class discovery in Cascabel,” he added.
The camp at SolGold’s Cascabel copper-gold project, 180 km north of the capital, Quito. Credit: SolGold
The news comes just a day after SolGold said it was delaying the feasibility study for the project due to capital cost uncertainties. The company will be studying opportunities to derisk the project, reduce costs and further improve economics.
SolGold’s 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.
Over the last two years, Ecuador has attracted a flurry of interest from big miners looking to increase their exposure to copper, and Cascabel is seen as one of its most prized assets. Amongst the key players invested in the project are BHP (NYSE: BHP; LSE: BHP) and Newcrest Mining (TSX: NCM; ASX: NCM).
According to the prefeasibility study published in April, annual production will average 132,000 tonnes of copper, 358,000 oz. of gold and 1 million ounces of silver during its 55-year life-of-mine, making it potentially one of the 20 largest copper-gold mines in South America.
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