London- and Toronto-listed SolGold has announced a complementary investment protection agreement (IPA) for the Cascabel project, in Ecuador.
The signing of a joint declaration with the government took place in Toronto at the Prospectors and Developers Association of Canada (PDAC) convention on Wednesday, representing a major advancement for the project and SolGold’s partnership with Ecuador.
In addition to the $311-million investment addressed by the current IPA, under the complementary IPA, there is a commitment to invest a total of $3.2-billion over the subsequent years in activities related to the Cascabel mining concession.
The complementary IPA embodies the biggest investment in Ecuadorian history.
"The complementary investment protection agreement not only reinforces the protections for our key investment in Ecuador, but also symbolises a deepening of our relationship with the Ecuadorian State,” said SolGold president and CEO Scott Caldwell.
Caldwell, on behalf of SolGold, signed the agreement with Ecuador Production, Foreign Trade, Investments and Fisheries Minister Sonsoles García.
Caldwell said President Daniel Noboa's attendance and speech at the PDAC convention were warmly welcomed by the mining community. “ . . . [it] underscores the significant support of his administration for responsible mining in Ecuador,” he said.
SolGold last month announced the results of a new prefeasibility study (PFS) for the Cascabel project, which supports a phased block cave mine development that substantially reduced the initial capital expenditure (capex) required.
The PFS puts an initial capex price tag of $1.55-billion on Cascabel, which the company noted was a $1-billion saving on previous estimates.
The initial block cave will achieve a production rate of 12-million tonnes a year, extracting high-grade ore of about 1.45% copper-equivalent for the first ten years of production.
SolGold points out that the extraction of high-grade material will not sterilise the surrounding lower-grade ore.
In the second phase, the mining operations will be expanded by an additional 12-million tonnes a year, increasing the yearly production rate to 24-million tonnes in year six.
Over an initial 28-year mine life, Cascabel will produce 4.3-million tonnes of copper equivalent, comprising 2.9-million tonnes of copper, 6.9-million ounces of gold and 18.4-million ounces of silver.
At peak production, the mine will yield 216 000 t/y of copper, 734 000 oz/y of gold and 1.16-million ounces of silver a year.
BHP owns 10.36% of SolGold and Newmont acquired 10.31% when it took control of Newcrest.