SolGold says the signing of an exploitation contract for its proposed US$1.55 billion Cascabel copper-gold project that guarantees Ecuador’s national government gets “at least 50%” of the cumulative discounted benefits of the initial 33-year venture is a landmark achievement for the company and its stakeholders.
“We are strongly committed to cultivating sustainable development and shared prosperity in Ecuador and its communities,” SolGold CEO Scott Caldwell said.
Ecuador vice minister of mines Diego Ocampo said the signing of the contract “represents a new era of economic development for Ecuador”.
“The government of Ecuador supports the Cascabel project, which will bring substantial long-term benefits to our country’s economy and local communities through significant investment, job creation, and sustainable growth,” he said.
London and Toronto-listed SolGold drilled the discovery hole at Alpala in early 2014 and has since completed more than 300,000m of cored exploration, resource definition and geotechnical drill holes and has conducted numerous resource, mining, metallurgical, environmental and social studies on the project.
The company expects Cascabel to produce an average 123,000 tonnes a year of copper, 277,000 ounces a year of gold and 794,000ozpa of silver – 182,000tpa copper-equivalent – from a start-up 12 million tonnes per annum mill and block cave underground mine.
The initial cave is projected to yield 1.45% copper-equivalent ore for the first 10 years of production, without sterilising surrounding lower-grade ore. Ramp-up to 24Mtpa in year six of operations is expected to be funded from project cash flow.
SolGold expects to pay corporate tax at a rate of 20% over the life of the project, and 3% to 8% royalties on net smelter revenues depending on the mineral type and its price.
“One of the most crucial principles that the EC develops is the autonomy and freedom of the company to make its commercial decisions,” SolGold said.
“The technical design of the mine, investment amount, production capacity, etc, are decisions of the company and respond to its business strategy.”
