Mr. Nicholas Mather reports
SOLGOLD PLC ANNOUNCES MARKET UPDATE
Solgold PLC has provided an update in respect of the company's project activities, corporate activities and relevant market circumstances.
- Preliminary economic analysis (PEA) phase 1 -- update on timing for completion and release;
Formal documentation for Solgold's announced bid for Cornerstone Capital Resources Inc. pending upon completion of translation into French language as required pursuant to applicable law;
Cascabel site activity continuing unabated with resource extension, geotechnical and hydrogeological drilling;
Exploration progress update for regional exploration projects in preparation;
Exploration and development initiatives by third parties continuing to reduce perceived sovereign risks in Ecuador.
Preliminary economic analysis update
The preliminary economic analysis (PEA) for the Alpala project is at a very advanced stage and the company expects to complete and release it following peer review and quality assurance/quality control procedures. Solgold has taken steps to ensure the PEA addresses all identifiable major areas of material upside, risks and returns, with a view to maximizing the project's modelled returns and long-run benefits to the Ecuadorian economy. Preliminary mine plan assessments and preliminary metallurgical data have been more complex than originally anticipated and the company's consultants have conducted a number of initiatives to ensure the identification of best mining and metallurgical practices and development alternatives. These delays have been unavoidable but necessary to deliver a high-quality study.
Site activity update
The company continues to engage 11 drilling rigs on site at Cascabel conducting drilling at the rate of 10,000 metres a month on resource extension drilling, with a focus on higher-grade mineralization to the northwest and southeast of the Alpala resource. In addition, the company is conducting sterilization drilling and geotechnical drilling of the proposed plant site and proposed decline route.
Cornerstone bid progress
The company is finalizing formal documentation for the bid for the share capital of TSX Venture Exchange-listed Cornerstone Capital Resources Inc. This is expected to be completed shortly and has taken longer than anticipated, allowing for the complexity of the taxation and other considerations to ensure the most advantageous treatment of Cornerstone shareholders, and the requirement for translation of the entire document into French.
While the formal bid documentation will address all of the relevant issues and matters raised in Cornerstone's latest announcement dated March 8, 2019, Solgold reiterates the following key points of the proposed bid:
- Solgold's proposal at the time of the announcement was made at a 20-per-cent premium. Cornerstone shareholders continue to enjoy this effect. Withdrawal of, or failure of Solgold's bid could have a negative or depressing effect on the illiquid Cornerstone market.
- Solgold holds a registered and beneficial interest of 85 per cent in Explorationes Novomining SA (ENSA) which holds the Cascabel concession in which the Alpala resource is located.
- Should the bid be successful, all Cornerstone shareholders will benefit greatly from consolidation of the project to increase focus and attention on the Solgold capital structure.
- Solgold's award-winning management team is applying the exploration expertise, regional familiarity and blueprint throughout the country, based on the company's extensive exploration portfolio secured pursuant to its 2014 first-mover advantage in Ecuador as a serious copper-gold porphyry explorer.
Solgold also wishes to refute Cornerstone's various assertions contained in Cornerstone's release and will do so in detail when the formal bid documentation is released.
Additional factors affecting Solgold market:
- Solgold noted that BHP recently signed a letter of intent for an earn-in and joint venture agreement with Luminex Resources' copper project in Ecuador, with the right to own up to a 70-per-cent stake in the Tarqui project by the payment of $7-million (U.S.) and expenditure of $75-million (U.S.) reducing perceived sovereign risks in Ecuador.
- Solgold noted the announcement of the pending agreement between the Chilean state copper mining giant Codelco and Ecuadorian government-owed corporation Enami, for the development of the 990-million-tonne 0.9 per cent copper Llurimagua copper project 60 kilometres south of Cascabel, is also reducing perceived sovereign risks in Ecuador.
About the Cascabel project
The Cascabel project's Alpala deposit is located in northern Ecuador, lying upon the northern section of the prolific Andean copper belt, renowned as the base for nearly half of the world's copper production. The project area hosts mineralization 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 is a three-hour drive north of Quito, close to water, power supply and Pacific ports. Solgold holds an 85-per-cent registered and beneficial interest in ENSA which holds 100 per cent of the Cascabel tenement.
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