- SolGold (TSX:SOLG) has signed a US$750 million syndicated gold stream agreement with Franco-Nevada (TSX:FNV) and Osisko Gold Royalties (TSX:OR) on its Cascabel project in Ecuador, representing the most significant investment in the country’s mining history
- Franco-Nevada and Osisko will receive 20 per cent of the gold recovered from Cascabel until 750,000 ounces, then reducing to 12 per cent for the life of the mine
- SolGold is dedicated to generating shareholder value through the discovery, definition and development of world-class copper and gold deposits
- SolGold stock has given back 48.28 per cent year-over-year and 69.39 per cent since 2019
SolGold (TSX:SOLG) has signed a US$750 million syndicated gold stream agreement with Franco-Nevada (TSX:FNV) and Osisko Gold Royalties (TSX:OR) on its Cascabel project in Ecuador, representing the most significant investment in the country’s mining history.
The funds will allow SolGold to complete de-risking activities, technical work, environmental permitting work and Cascabel‘s feasibility study, as well as break ground on project construction.
Franco-Nevada and Osisko will receive a combined 20 per cent of the gold recovered from Cascabel until 750,000 ounces, then reducing to 12 per cent for the life of the mine.
The agreement will not affect SolGold revenue streams from the large copper, silver and remaining gold resources housed within the project. The 2024 pre-feasibility study estimates:
- Average production of 123,000 tonnes of copper, 277,000 ounces of gold and 794,000 ounces of silver per year from year 6-23 at full nameplate capacity.
- An after-tax net present value (8 per cent) of US$3.2 billion at base cases of US$3.85 per pound of copper and US$1,750 per ounce of gold.
Despite this significant agreement, SolGold will require about US$1.55 billion for Cascabel to be fully built, according to the project’s pre-feasibility study. The copper and gold stock is reviewing additional funding options, which may include deals with international development banks and off-take agreements with smelting companies.
SolGold will delve straight into project advancement with guidance from its two heavyweight backers, including geotechnical drilling of the tailings storage facility, additional metallurgical testing, reserves definition at the Tandayama-Ameríca deposit, plant location, and mine site design and layout.
Click here for full details on the most significant investment in Ecuador’s mining history.
Leadership insights
“We are thrilled to finalize this transformative US$750 million gold stream with Franco-Nevada and Osisko,” Scott Caldwell, SolGold’s president and chief executive officer, said in a statement. “This agreement not only secures a significant portion of the capital required to fund the construction of Cascabel, but also validates the vast potential of the Cascabel project. The US$100 million dedicated to de-risking and technical work is crucial for the next steps in our project development. We are committed to advancing our operations responsibly and efficiently, and this partnership is a testament to our progress to date and the promising future ahead. Finally, this major investment in Ecuador reflects the strong support from the Ecuadorian government for the mining industry.”
“We are excited to support SolGold in the development of their world-class Cascabel project,” commented Paul Brink, Franco-Nevada’s president and chief executive officer. “This gold stream agreement aligns with our strategy to invest in high-quality assets with significant growth potential. We believe SolGold’s flagship project will be amongst the next generation of large copper development projects and will contribute meaningfully to our longer-term growth. We are pleased to provide pre-construction funding to de-risk project development and project financing that provides a balance of funding certainty and financial flexibility.”
“Cascabel represents one of the most significant copper-gold discoveries in recent history,” added Jason Attew, Osisko’s president and chief executive officer. “The project has the potential to become a world-class multi-generational mine, demonstrated by the recent pre-feasibility study estimating at least a 28-year mine life with numerous avenues for additional mine life extensions. This new stream investment, which complements Osisko’s existing royalty on the project, will help to support the development of this exceptional asset and enhance Osisko’s long-term growth profile.”
About SolGold
SolGold is dedicated to generating shareholder value through the discovery, definition and development of world-class copper and gold deposits.
SolGold stock (TSX:SOLG) last traded at C$0.15 per share. The stock has given back 48.28 per cent year-over-year and 69.39 per cent since 2019.
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(Top photo of SolGold’s CEO Scott Caldwell and chief geologist Santiago Vaca: SolGold)