SolGold has secured a $750m (A$1.11m) financing package for the advancement of its Cascabel Project in northern Ecuador’s Imbabura province.
Financing Details
In this regard, a syndicated gold stream agreement was signed with Franco-Nevada (Barbados) and Osisko Bermuda (together referred to as the syndicate). The funds, provided by the syndicate, will be allocated towards project development in exchange for a share of the gold produced.
The financing agreement is structured in two parts, with Franco-Nevada and Osisko contributing 70% and 30%, respectively. An initial deposit of $100m will be released in three tranches to support various pre-construction activities.
Additional Insight
It is essential for mining companies like SolGold to secure substantial financing packages to move forward with large-scale projects like Cascabel. This funding will enable them to progress through critical stages of development and ensure the project’s success in the long term.
Project Development
SolGold noted that the bulk of the funding, amounting to $650m, will be directed towards the construction of the Cascabel Project. The company will initiate geotechnical drilling, metallurgical testing, and securing land access rights for infrastructure as part of the next phase of project advancement.
Strategic Flexibility
The financing agreement with provisions for a buyback option provides SolGold with strategic flexibility. The option to reduce the stream within a specified timeframe allows the company to adjust its financial commitments based on project developments and market conditions.
In return for the financing, the syndicate will receive a share of the gold recovered from the project until certain milestones are reached, providing a mutually beneficial arrangement for both parties.
Stakeholder Commitments
This financing agreement allows SolGold to retain revenue from copper, silver, and a significant portion of the gold resources at Cascabel while meeting its commitments to royalty holders, the Ecuadorian Government, and other stakeholders.
Company Comments
SolGold president and CEO Scott Caldwell expressed the significance of the agreement in funding Cascabel’s construction and validating the project’s potential. He highlighted the collaboration with the syndicate as instrumental in advancing the project responsibly and efficiently.
Finally, SolGold’s investment in Ecuador reflects the positive support from the Ecuadorian Government for the mining industry, showcasing a promising future for mining ventures in the region.
Last month, SolGold signed an exploitation agreement with the Ecuadorian Government for the Cascabel Project.
