SolGold is a leading resources company focused on the discovery, definition and development of world-class copper and gold deposits
SolGold provides update on merger. (Credit: 652234 from Pixabay)
The Board of Directors of SolGold (LSE:SOLG)(TSX:SOLG) is pleased to provide an update regarding the Company’s activities and ongoing initiatives following the merger with Cornerstone Capital Resources Inc. (“Cornerstone”) consolidating 100% of the world-class Cascabel Project.
Strategic Review Progressing – Focused on Value Maximization
– Discussions ongoing with highly credible groups at different stages of their review
– Over 20 active CAs in place with over 5 site visits already conducted
Secured Funding to Ensure Strong Balance Sheet
– US$86 million raised through the 2022 royalty investment by Osisko Gold Royalties Ltd and equity financing, which included Jiangxi Copper Company Limited
– Work plans funded for FY 2024 – no additional financing required in the near-term
Key Management Alignment with Shareholders
– Scott Caldwell and Chris Stackhouse appointed as CEO and CFO, respectively
– Low annual base salary of US$200,000 for the CEO and CFO; equity compensation tied to higher share prices to be “in-the-money” ensuring full alignment with shareholders
– Meaningful personal investments by management in SolGold shares
Organizational Optimization
– Nearly 70% reduction in group headcount – 282 in September 2023 vs. 894 in FY 2022
– Significant reduction in spend achieved with a continuous focus on lowering costs
– SolGold CEO Scott Caldwell relocated to Ecuador to lead operations in the country
Key Contract Terms for Cascabel Exploitation Agreement with the Government of Ecuador
– The Exploitation Agreement covers a renewable 33-year period
– Based on a lower corporate income tax rate of 20% (previously 25%) during the project life, sliding scale royalty of 3-8% depending on the mineral and its price (“EA Royalty”)
– Advance royalty payment of US$75 million is deductible against the EA Royalty and payable in equal instalments over three years only when the operator starts construction of the concentrator (i.e., only when major construction of the project is underway)
Advancing & De-Risking Cascabel – Select Next Steps
– Development Stage Exploration Permit for Early Works
– Amended Investment Protection Agreement
– Permitting/Environmental and Social Impact Assessment
– Phased Approach internal study being advanced with a revised pre-feasibility study expected to demonstrate a lower risk path for Cascabel with reduced capital intensity
Scott Caldwell, SolGold’s CEO and President of SolGold Ecuador, commented:
“Since being appointed to a leadership role at SolGold, we have made tremendous progress to ensure a strong balance sheet, improve our operational focus and advance the strategic review. With the unwavering support of the Board, I have now implemented a hard reset within the organization, placing accountability to all stakeholders as a core principle. SolGold is now in its best position ever and we remain fully committed to ensuring that all shareholders are rewarded for funding the world-class Cascabel discovery.
Our top priority is to continue advancing the ongoing strategic review. Cascabel is undeniably recognized as a significant strategic asset with a high-quality resource. I firmly believe Cascabel will one day become a multigenerational mine and a substantial contributor to the Ecuadorian economy. Consequently, external groups evaluating the project are being very diligent in their review as they progress through various stages in their internal processes. In parallel, we continue to advance and de-risk Cascabel to position it as a turn-key asset.”
Strategic Review Update
The SolGold Board, with its advisors, continues to advance the previously announced Strategic Review. As previously disclosed, the Strategic Review includes, among other things, evaluating and pursuing value-enhancing opportunities for the Company.
The Company is in discussions with a number of highly credible groups who are at different stages of their review with interest in Cascabel and/or SolGold’s Ecuadorian exploration portfolio. There are over 20 active confidentiality agreements (“CAs”) in place and over 5 groups have already completed site visits with a number of follow-up visits being scheduled. It is very clear through this review that Cascabel is recognized as a world-class asset of significance, with parties being very diligent in their review given the size and potential scale of the asset.
Source: Company Press Release