BISHOPSGATE, LONDON / ACCESSWIRE / February 24, 2020 / SolGold (LSE:SOLG) (TSX: SOLG) advises that The Constitutional Court of Ecuador ("the Court") has ruled against a second petition to seek local consultation to consider the prohibition of mining activities within the province of Azuay, Southern Ecuador. The province of Azuay contains SolGold's 100% owned Sharug project, a high priority project that SolGold believes has considerable potential for the discovery of a world class orebody with commensurate benefits for Ecuador and SolGold.
In the recent statement made Friday, 22 February 2020, Ecuador's Ministry of Energy and Non-Renewable Natural Resources said the government "reaffirms its commitment to promote responsible, regulated and controlled mining in all Ecuadorean territory."
The Constitutional Court denied the first question put forward due to technical/procedural issues, for the lack of precision and clarity in compliance with the law. The second question was also denied as the Court concluded that raising the generalised query for the automatic cancellation of previously granted concessions, goes against the principle of non-retroactivity of the law, which might result in the affectation of third parties´ constitutional rights. Likewise, the Court mentioned that the recitals did not meet the minimum requirements established by the Court in previous cases.
Due to the new questions raised by this particular petition, it is clear that the Constitutional Court have provided a specific ruling, as well as rational arguments to determine the legal rights of existing mining concessions.
This decision, in conjunction with the previously rejected petitions of a similar nature in both the Imbabura and Azuay provinces, sets a strong precedent for any future petitions for consultation to consider changes to the constitution of Ecuador.
SolGold continues to work closely with all levels of the Ecuadorean government and with the local communities within which SolGold and its regional subsidiaries operate to create a sustainable and responsible mining industry in Ecuador.
By order of the Board
Karl Schlobohm
Company Secretary
Qualified Person:
Information in this report relating to the exploration results is based on data reviewed by Mr Jason Ward ((CP) B.Sc. Geol.), the Chief Geologist of the Company. Mr Ward is a Fellow of the Australasian Institute of Mining and Metallurgy, holds the designation FAusIMM (CP), and has in excess of 20 years' experience in mineral exploration and is a Qualified Person for the purposes of the relevant LSE and TSX Rules. Mr Ward consents to the inclusion of the information in the form and context in which it appears.
CONTACTS
Nicholas Mather
SolGold Plc (Chief Executive Officer) nmather@solgold.com.au
Tel: +61 (0) 7 3303 0665
+61 (0) 417 880 448
Karl Schlobohm
SolGold Plc (Company Secretary)
kschlobohm@solgold.com.au
Tel: +61 (0) 7 3303 0661
Ingo Hofmaier
SolGold Plc (GM – Project & Corporate Finance) ihofmaier@solgold.com.au
Tel: +44 (0) 20 3823 2131
Gordon Poole / Nick Hennis
Camarco (Financial PR / IR)
solgold@camarco.co.uk
Tel: +44 (0) 20 3757 4997
Andrew Chubb
Hannam & Partners (Joint Broker and Financial Advisor)
solgold@hannam.partners
Tel: +44 (0) 20 7907 8500
Ross Allister / David McKeown
Peel Hunt (Joint Broker and Financial Advisor)
solgold@peelhunt.com
Tel: +44 (0)20 7418 8900
James Kofman / Darren Wallace
Cormark Securities Inc. (Financial Advisor)
dwallace@cormark.com
Tel: +1 416 943 6411
Follow us on twitter @SolGold_plc
ABOUT SOLGOLD
SolGold is a leading exploration company focussed on the discovery, definition and development of world-class copper and gold deposits. In 2018 SolGold's management team was recognised by the "Mines and Money" Forum as an example of excellence in the industry, and continues to strive to deliver objectives efficiently and in the interests of shareholders. SolGold is the largest and most active concession holder in Ecuador and is aggressively exploring the length and breadth of this highly prospective and gold-rich section of the Andean Copper Belt.
The Company operates with transparency and in accordance with international best practices. SolGold is committed to delivering value to its shareholders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact.
Dedicated stakeholders
SolGold employs a staff of 737 employees of whom 98% are Ecuadorean. This is expected to grow as the operations expand at Alpala, and in Ecuador generally. SolGold focusses its operations to be safe, reliable and environmentally responsible and maintains close relationships with its local communities. SolGold has engaged an increasingly skilled, refined and experienced team of geoscientists using state of the art geophysical and geochemical modelling applied to an extensive data base to enable the delivery of ore grade intersections from nearly every drill hole at Alpala. SolGold has 85 geologists, of whom 12% are female, on the ground in Ecuador exploring for economic copper and gold deposits.
About Cascabel and Alpala
The Alpala deposit is the main target in the Cascabel concession, located on the northern section of the heavily endowed Andean Copper Belt, the entirety of which is renowned as the base for nearly half of the world's copper production. The project area hosts mineralisation of Eocene age, the same age as numerous Tier 1 deposits along the Andean Copper Belt in Chile and Peru to the south. The project base is located at Rocafuerte within the Cascabel concession in northern Ecuador, an approximately three-hour drive on sealed highway north of the capital Quito, close to water, power supply and Pacific ports.
Having fulfilled its earn-in requirements, SolGold is a registered shareholder with an unencumbered legal and beneficial 85% interest in ENSA (Exploraciones Novomining S.A.) which holds 100% of the Cascabel concession covering approximately 50km2. The junior equity owner in ENSA is required to repay 15% of costs since SolGold's earn in was completed, from 90% of its share of distribution of earnings or dividends from ENSA or the Cascabel concession. It is also required to contribute to development or be diluted, and if its interest falls below 10%, it shall reduce to a 0.5% NSR royalty which SolGold may acquire for US$3.5m.
Over 227,000m of diamond drilling has been completed on the project. The Cascabel exploration program is currently focussed on extending and upgrading the status of the Alpala resource, as well as further drill testing of the evolving Aguinaga prospect. Drill testing of the Trivinio target has commenced, whilst the numerous other untested targets, namely at Moran, Cristal, Tandayama-America and Chinambicito, are flagged for drill testing as overall program demands allow.
The 15 November 2018 Alpala MRE#2 update was estimated from 68,173 assays. Drill core samples were obtained from a total of 133,576m drilled from 128 diamond drill holes, including 75 drill holes with 34 daughter holes, 8 redrills, and 11 over-runs. Full assay data was received from holes 1-67 while partial assay data was received from holes 68 to 75. In contrast, the December 2017 maiden MRE#1 was estimated from 26,814 assays obtained from 53,616m of drilling comprising 45 drill holes, including 10 daughter holes and 5 redrills.
The November 2018 Alpala updated Mineral Resource Estimate (MRE#2) totals a current:
2,050 Mt @ 0.60% CuEq (at 0.2% CuEq cut-off) in the Indicated category, and
900 Mt @ 0.35% CuEq (at 0.2% CuEq cut-off) in the Inferred category.
Contained metal content of 8.4 Mt Cu and 19.4 Moz Au in the Indicated category.
Contained metal content of 2.5 Mt Cu and 3.8 Moz Au in the Inferred category.
Investors should consult the technical report dated 3 January 2019 for a detailed account of the assumptions on which these estimates were based as well as any known legal, political, environmental and other risks that could materially affect the development of the resources.
Advancing Alpala towards development
The resource at the Alpala deposit boasts a high grade core which is targeted to facilitate early cashflows and an accelerated payback of initial capital. SolGold is currently assessing financing options available to the Company for the development of the Alpala mine following completion of the Definitive Feasibility Study.
The results of the Preliminary Economic Assessment (PEA) at Alpala were published on 20 May 2019, highlighting the following key aspects:
Net Present Value ("NPV") estimates range from US$4.1bn to US$4.5bn (Real, post-tax, @ 8% discount rate, US$3.3/lb copper price, US$1,300/oz gold price and US$16/oz silver price) depending on production rate scenario.
Internal Rate of Return ("IRR") estimates range from 24.8% to 26.5% (Real, post-tax, US$3.3/lb copper price, US$1,300/oz gold price and US$16/oz silver price) depending on production rate scenario.
Pre-production Capex estimated at approx. US$2.4bn to US$2.8bn, and total Capex including life of mine sustaining Capex of US$10.1bn to US$10.5bn depending on production rate scenario.
Payback Period on initial start-up capital – Range from 3.5 years to 3.8 years after commencement of production depending on production rate scenario.
Preferred Mining Method – Underground low-cost mass mining using Block Cave methods applied over several caves designed on two vertically extensive Lifts.
Full results and all details of the PEA are available in the Company's market release of 20 May 2019.
SolGold's regional exploration drive
SolGold is using its successful and cost-efficient blueprint established at Alpala, and Cascabel generally, to explore for additional world class copper and gold projects across Ecuador. SolGold is the largest and most active concessionaire in Ecuador.
The Company wholly owns four other subsidiaries active throughout the country that are now focussed on thirteen high priority gold and copper resource targets, several of which the Company believes have the potential, subject to resource definition and feasibility, to be developed in close succession or even on a more accelerated basis compared to Alpala.
SolGold is listed on the London Stock Exchange and Toronto Stock Exchange (LSE/TSX: SOLG). The Company has on issue a total of 1,923,321,033 fully-paid ordinary shares and 176,662,000 share options.
Quality Assurance / Quality Control on Sample Collection, Security and Assaying
SolGold operates according to its rigorous Quality Assurance and Quality Control (QA/QC) protocol, which is consistent with industry best practices.
Primary sample collection involves secure transport from SolGold's concessions in Ecuador, to the ALS certified sample preparation facility in Quito, Ecuador. Samples are then air freighted from Quito to the ALS certified laboratory in Lima, Peru where the assaying of drill core, channel samples, rock chips and soil samples is undertaken. SolGold utilises ALS certified laboratories in Canada and Australia for the analysis of metallurgical samples.
Samples are prepared and analysed using 100g 4-Acid digest ICP with MS finish for 48 elements on a 0.25g aliquot (ME-MS61). Laboratory performance is routinely monitored using umpire assays, check batches and inter-laboratory comparisons between ALS certified laboratory in Lima and the ACME certified laboratory in Cuenca, Ecuador.
In order to monitor the ongoing quality of its analytical database, SolGold's QA/QC protocol encompasses standard sampling methodologies, including the insertion of certified powder blanks, coarse chip blanks, standards, pulp duplicates and field duplicates. The blanks and standards are Certified Reference Materials supplied by Ore Research and Exploration, Australia.
SolGold's QA/QC protocol also monitors the ongoing quality of its analytical database. The Company's protocol involves Independent data validation of the digital analytical database including search for sample overlaps, duplicate or absent samples as well as anomalous assay and survey results. These are routinely performed ahead of Mineral Resource Estimates and Feasibility Studies. No material QA/QC issues have been identified with respect to sample collection, security and assaying.
Reviews of the sample preparation, chain of custody, data security procedures and assaying methods used by SolGold confirm that they are consistent with industry best practices and all results stated in this announcement have passed SolGold's QA/QC protocol.
See www.solgold.com.au for more information. Follow us on twitter @SolGold_plc
CAUTIONARY NOTICE
News releases, presentations and public commentary made by SolGold plc (the "Company") and its Officers may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to interpretations of exploration results to date and the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's Directors. Such forward-looking and interpretative statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such interpretations and forward-looking statements.
Accordingly, the reader should not rely on any interpretations or forward-looking statements; and save as required by the exchange rules of the TSX and LSE or by applicable laws, the Company does not accept any obligation to disseminate any updates or revisions to such interpretations or forward-looking statements. The Company may reinterpret results to date as the status of its assets and projects changes with time expenditure, metals prices and other affecting circumstances.
This release may contain "forward‑looking information" within the meaning of applicable Canadian securities legislation. Forward‑looking information includes, but is not limited to, statements regarding the Company's plans for developing its properties. Generally, forward‑looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward‑looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward‑looking information, including but not limited to: transaction risks; general business, economic, competitive, political and social uncertainties; future prices of mineral prices; accidents, labour disputes and shortages and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward‑looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
The Company and its officers do not endorse, or reject or otherwise comment on the conclusions, interpretations or views expressed in press articles or third-party analysis, and where possible aims to circulate all available material on its website.
The Company recognises that the term "World Class" is subjective and for the purpose of the Company's projects the Company considers the drilling results at the growing Alpala Porphyry Copper Gold Deposit at its Cascabel Project to represent intersections of a "World Class" deposit. The Company considers that "World Class" deposits are rare, very large, long life, low cost, and are responsible for approximately half of total global metals production.
"World Class" deposits are generally accepted as deposits of a size and quality that create multiple expansion opportunities, and have or are likely to demonstrate robust economics that ensure development irrespective of position within the global commodity cycles, or whether or not the deposit has been fully drilled out, or a feasibility study completed.
Standards drawn from industry experts (1) Singer and Menzie, 2010; (2) Schodde, 2006; (3) Schodde and Hronsky, 2006; (4) Singer, 1995; (5) Laznicka, 2010) have characterised "World Class" deposits at prevailing commodity prices. The relevant criteria for "World Class" deposits, adjusted to current long run commodity prices, are considered to be those holding or likely to hold more than 5 million tonnes of copper and/or more than 6 million ounces of gold with a modelled net present value of greater than USD 1 Billion.
The Company and its external consultants prepared an initial Mineral Resource Estimate at the Cascabel Project in December 2017. Results of the updated Mineral Resource Estimate, released in November 2018, are summarised in Table B attached.
The updated Mineral Resource Estimate was completed from 133,576m of drilling, comprising 128 diamond drill holes, including 75 drill holes, 34 daughter holes, 8 re-drills, and 11 over-runs, and represents full assay data from holes 1-67 and partial assay data received from holes 68-75. There remains strong potential for further growth from more recent drilling results, and continue rapid growth of the deposit.
Any development or mining potential for the project remains speculative.
Drill hole intercepts have been updated to reflect current commodity prices, using a data aggregation method, defined by copper equivalent cut-off grades and reported with up to 10m internal dilution, excluding bridging to a single sample. Copper equivalent grades are calculated using a gold conversion factor of 0.63, determined using an updated copper price of USD3.00/pound and an updated gold price of USD1300/ounce. True widths of down hole intersections are estimated to be approximately 25-70%.
On the basis of the drilling results to date and the results of the Alpala Maiden Mineral Resource Estimate, the reference to the Cascabel Project as "World Class" (or "Tier 1") is considered to be appropriate. Examples of global copper and gold discoveries since 2006 that are generally considered to be "World Class" are summarised in Table A.
References cited in the text:
1.
Singer, D.A. and Menzie, W.D., 2010. Quantitative Mineral Resource Assessments: An Integrated Approach. Oxford University Press Inc.
2.
Schodde, R., 2006. What do we mean by a world class deposit? And why are they special. Presentation. AMEC Conference, Perth.
3.
Schodde, R and Hronsky, J.M.A, 2006. The Role of World-Class Mines in Wealth Creation. Special Publications of the Society of Economic Geologists Volume 12.
4.
Singer, D.A., 1995, World-class base and precious metal deposits-a quantitative analysis: Economic Geology, v. 90, no.1, p. 88-104.
5.
Laznicka, P., 2010. Giant Metallic Deposits: Future Sources of Industrial Metal, Second Edition. Springer-Verlag Heidelberg.
Deposit Name
Discovery
Year
Major Metals
Country
Current Status
Mining Style
Inventory
LA COLOSA
2006
Au, Cu
Colombia
Feasibility – New Project
Open Pit
1 469Mt @ 0.95g/t Au; 14.3Moz Au
LOS SULFATOS
2007
Cu, Mo
Chile
Advanced Exploration
Underground
2 1.2Bt @1.46% Cu & 0.02% Mo; 17.5Mt Cu
BRUCEJACK
2008
Au
Canada
Development/Construction
Open Pit
3 15.6Mt @ 16.1 g/t Au; 8.1Moz Au
KAMOA-KAKULA
2008
Cu, Co, Zn
Congo (DRC)
Feasibility – New Project
Open Pit & Underground
4 1.3Bt @ 2.72% Cu; 36.5 Mt Cu
GOLPU
2009
Cu, Au
PNG
Feasibility – New Project
Underground
5 820Mt @ 1.0% Cu, 0.70g/t Au; 8.2Mt Cu, 18.5Moz Au
COTE
2010
Au, Cu
Canada
Feasibility Study
Open Pit
6 289Mt @ 0.90 g/t Au; 8.4Moz Au
HAIYU
2011
Au
China
Development/Construction
Underground
7 15Moz Au
RED HILL-GOLD RUSH
2011
Au
United States
Feasibility Study
Open Pit & Underground
8 47.6Mt @ 4.56 g/t Au; 7.0Moz Au
XILING
2016
Au
China
Advanced Exploration
Underground
9 383Mt @ 4.52g/t Au; 55.7Moz Au
Source: after MinEx Consulting, May 2017
1 Source: http://www.mining‐technology.com/projects/la‐colosa
2 Source: http://www.angloamerican.com/media/press‐releases/2009
3 Source: http://www.pretivm.com/projects/brucejack/overview/
4 Source: https://www.ivanhoemines.com/projects/kamoa‐kakula‐project/
5 Source: http://www.newcrest.com.au/media/resource_reserves/2016/December_2016_Resources_and_Reserves_Statement.pdf
6 Source: http://www.canadianminingjournal.com/news/gold‐iamgold‐files‐cote‐project‐pea/
7 Source: http://www.zhaojin.com.cn/upload/2015‐05‐31/580601981.pdf
8 Source: https://mrdata.usgs.gov/sedau/show‐sedau.php?rec_id=103
9 Source: http://www.chinadaily.com.cn/business/2017‐03/29/content_28719822.htm
Table A: Tier 1 global copper and gold discoveries since 2006. This table does not purport to be exhaustive exclusive or definitive.
Grade
Category
Resource
Category
Tonnage
(Mt)
Grade
Contained Metal
Cu (%)
Au (g/t)
CuEq (%)
Cu
(Mt)
Au (Moz)
CuEq (Mt)
Total >0.2% CuEq
Indicated
2,050
0.41
0.29
0.60
8.4
19.4
12.2
Inferred
900
0.27
0.13
0.35
2.5
3.8
3.2
Table B: Alpala Mineral Resource Estimate updated effective 16 November 2018.
Notes:
·
Mr. Martin Pittuck, MSc, CEng, MIMMM, is responsible for this Mineral Resource estimate and is an "independent qualified person" as such term is defined in NI 43-101.
·
The Mineral Resource is reported using a cut-off grade of 0.3% copper equivalent calculated using [copper grade (%)] + [gold grade (g/t) x 0.6] based on a copper price of US$2.8/lb and gold price of US$1,160/oz.
·
The Mineral Resource is considered to have reasonable potential for eventual economic extraction by underground mass mining such as block caving.
·
Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
·
The statement uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and Mineral Reserves (May 2014).
·
The MRE is reported on 100 percent basis.
·
Values given in the table have been rounded, apparent calculation errors resulting from this are not considered to be material.
·
The effective date for the Mineral Resource statement is 16 November 2018.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
SOURCE: SolGold PLC
ReleaseID: 577521
