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Shares in Ecuador-focused SolGold (LON, TSX: SOLG) shot up more than 23% on Wednesday after the company announced a $3.2 billion investment from the country’s government in its flagship Cascabel copper-gold project in coming years.
The deal is the largest mining investment in Ecuador’s history, according to SolGold, and it is separate from the government’s already committed $311 million for the project, included in the current Investment Protection Agreement (IPA) for Cascabel.
The complementary IPA, inked at the at the Prospectors and Developers Association of Canada (PDAC) convention in Toronto, highlights the scale and importance of the project, SolGold said in the statement.
“[This deal] not only reinforces the protections for our key investment in Ecuador but also symbolizes a deepening of our relationship with the Ecuadorian State,” chief executive Scot Caldwell said.
SolGold released in February a new pre-feasibility study (PFS) for Cascabel in which it managed to slash upfront costs. Pre-production capital used for initial mine development, first process plant module and infrastructure is now estimated at $1.55 billion, compared to $2.75 billion from the PFS issued in April 2022.
According to SolGold, the size of the entire resource indicates the mine’s potential to be a multi-generational asset, potentially one of the 20 largest copper-gold mines in South America. Mine construction is set to start in 2025.
Investors have been skeptical of SolGold management’s ability to deliver the project to its potential. The company’s share price has halved over the past year, while the miner has had to cut spending to stay afloat, prompting a strategic review of its assets.
SolGold’s shares were trading 23.07% higher in London mid-afternoon to 8.13p. Year-to-date, however, the stock is down more than 18%. The company’s current market capitalization is £243 million (about $310m).
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The post SolGold soars on $3.2bn investment, largest in Ecuador history appeared first on Energy News Beat.
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