SolGold reports interest in Cascabel

SolGold has signed over 20 confidentiality agreements and has hosted more than five site visits, with more being scheduled, since it began a strategic review process looking at a potential sale of the company or other alternatives to advance its Cascabel copper-gold project in Ecuador.

The company said it is advancing and de-risking Cascabel through a development stage exploration permit for early works, permitting and a revised prefeasibility study for a phased development approach which is expected to demonstrate a lower risk path for Cascabel with reduced capital intensity. It said its work plans for 2024 are funded with no additional financing required in the near-term.

The company is looking to shave at least US$1 billion off the initial development cost of Cascabel. The company aims to announce a new vision for Cascabel and an updated resource estimate in the March quarter of 2024. The 2022 prefeasibility study outlined an average production of 132,000tpy of copper, 358,000ozpa of gold and 1Moz/y of silver.

Since Scott Caldwell was appointed chief executive of the company in March following its merger with Cornerstone Capital Resources to consolidate ownership of Cascabel, there has been nearly a 70% reduction in group headcount to 282 in September from 894 in 2022, and consequent reduction in spend achieved.

"With the unwavering support of the board, I have now implemented a hard reset within the organisation, placing accountability to all stakeholders as a core principle. SolGold is now in its best position ever," said Caldwell.

SolGold said that while no additional funding is required at this time, there has been interest in the block of SolGold shares acquired through the Cornerstone transaction. However, it said there is no need to place those shares at this time.

Caldwell also noted how the illiquidity in the company's shares means relatively small buying or selling can have an outsized impact on the share price. Over the past six months, the average daily traded volume was only 0.1% of the SolGold shares outstanding.

"As a dedicated long-term shareholder since 2016, I too am disappointed in our current share price even though the company is currently in the strongest position it has ever been. It is important to note that the immaterial level of trading activity in our shares that has corresponded with a decline in our share price does not reflect the intrinsic value of our underlying assets. I firmly believe the fundamental value of our shares far exceeds their current market price, and I am fully committed, alongside the SolGold team, to ensuring a successful outcome," said Caldwell.

Shares in SolGold are trading at 15c, valuing the company at C$450 million.