BISHOPSGATE, UK / ACCESSWIRE / November 23, 2021 / The Board of Directors of SolGold (LSE & TSX:SOLG) is pleased to announce the signing of a preliminary commitment declaration with regard to an Exploration Investment Protection Agreement ('IPA') for the Cascabel project in northern Ecuador. The declaration was signed on 19th November 2021 in Quito, Ecuador between Mr. Guillermo Lasso Mendoza, President of Ecuador, and Mr. Andrew Taunton, Vice President of SolGold's Ecuador subsidiaries representing SolGold plc and SolGold Finance AG (together the 'Investors'), and Exploraciones Novomining S.A. and SolGold-Ecuador S.A. (together the 'Receiving Companies').
The terms of the IPA, submitted by application to the Ministry of Production, Foreign Trade, Investments and Fisheries ('MPCEIP') of Ecuador, includes an intention to invest a total of approximately US$430 million over the 10 years between 2013 and 2023 in minerals exploration activities in the Cascabel mining concession, in the canton of Ibarra, province of Imbabura, Ecuador. The US$430 million total includes both historical investments, with a total of approximately US$238 million estimated through to the end of 2021, and planned future investments through to the end of 2023 when the Exploration Phase of activities as defined under the mining law is anticipated to finish.
On 30th August 2021, the Strategic Committee for the Promotion and Attraction of Investments ('CEPAI'), the body in charge within the MPCEIP, analysed the legal and technical reports required to approve the SolGold application by the Investors and Receiving Companies and, by means of Resolution No. 065-CEPAI-2021, and with the unanimous vote of its members, recommended the execution of the IPA. In this context, the undersigned parties confirmed the commitment between the Ecuadorian State, the Investors and the SolGold Receiving Companies to execute the above-mentioned Exploration IPA in compliance with Ecuadorian law.
Once the IPA has been executed, the Ecuadorian State will grant the SolGold investor companies the applicable protections and guarantees in accordance with the law. Specific protections relate to the prohibition of all forms of confiscation, non-discriminatory treatment and equal playing field, legal security, tax stability for 15 years and international arbitration in London if there are any disputes in relation to the Cascabel Project. The SolGold Receiving Companies intend to disburse the planned future investments in exploration activities related to the Cascabel Project and to create among other benefits, direct and indirect employment over the next two years.
SolGold's Acting CFO Ingo Hofmaier commented on the IPA:
'Under the terms of this Agreement, SolGold's investors will enjoy increased protection of their key investment in Ecuador. As a firm we are delighted to be able to further deepen our relationship with the State of Ecuador and achieve another milestone in advancing Cascabel. Agreements like this create an alliance between the private sector and the state, critical in supporting large amounts of future investments. This was a major effort by the parties involved and the inclusion of a well drafted dispute resolution clause, with arbitration in London abiding to the rules of the International Chamber of Commerce will provide us with confidence for the upcoming project finance process.'
By order of the Board
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Certain information contained in this announcement would have been deemed inside information.
SolGold is a leading resources company focussed on the discovery, definition and development of world-class copper and gold deposits. In 2018, SolGold's management team was recognised by the 'Mines and Money' Forum as an example of excellence in the industry and continues to strive to deliver objectives efficiently and in the interests of shareholders. SolGold is aggressively exploring the length and breadth of this highly prospective and gold-rich section of the Andean Copper Belt which is currently responsible for c40% of global mined copper production.
The Company operates with transparency and in accordance with international best practices. SolGold is committed to delivering value to its shareholders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact.
SolGold employs a staff of over 800 employees of whom 98% are Ecuadorean. This is expected to grow as the operations expand at Alpala, and in Ecuador generally. SolGold focusses its operations to be safe, reliable and environmentally responsible and maintains close relationships with its local communities. SolGold has engaged an increasingly skilled, refined and experienced team of geoscientists using state of the art geophysical and geochemical modelling applied to an extensive database to enable the delivery of ore grade intersections from nearly every drill hole at Alpala. SolGold has over 80 geologists on the ground in Ecuador exploring for economic copper and gold deposits.
About Cascabel and Alpala
The Alpala deposit is the main target in the Cascabel concession, located on the northern section of the heavily endowed Andean Copper Belt, the entirety of which is renowned as the base for nearly half of the world's copper production. The project area hosts mineralisation 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 base is located at Rocafuerte within the Cascabel concession in northern Ecuador, an approximately three-hour drive on sealed highway north of the capital Quito, close to water, power supply and Pacific ports.
Having fulfilled its earn-in requirements, SolGold is a registered shareholder with an unencumbered legal and beneficial 85% interest in ENSA (Exploraciones Novomining S.A.) which holds 100% of the Cascabel concession covering approximately 50km2. The junior equity owner in ENSA is required to repay 15% of costs since SolGold's earn in was completed, from 90% of its share of distribution of earnings or dividends from ENSA or the Cascabel concession. It is also required to contribute to development or be diluted, and if its interest falls below 10%, it shall reduce to a 0.5% NSR royalty which SolGold may acquire for US$3.5million.
SolGold's Regional Exploration Drive
SolGold is using its successful and cost-efficient blueprint established at Alpala, and Cascabel generally, to explore for additional world class copper and gold projects across Ecuador. SolGold is the largest and most active concessionaire in Ecuador.
The Company wholly owns four other subsidiaries active throughout the country that are now focussed on thirteen high priority gold and copper resource targets, several of which the Company believes have the potential, subject to resource definition and feasibility, to be developed in close succession or even on a more accelerated basis compared to Alpala.
SolGold is listed on the London Stock Exchange and Toronto Stock Exchange (LSE/TSX: SOLG). The Company has on issue a total of 2,293,816,433 fully paid ordinary shares and 34,250,000 share options.
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SOURCE: SolGold PLC
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