Name of the Project
Alpala copper/gold/silver project.

Location
Northern Ecuador.

Project Owner/s
SolGold, which holds an 85% registered and beneficial interest in Exploraciones Novomining that, in turn, holds 100% of the Cascabel project.

Project Description
A preliminary economic assessment (PEA) has suggested that the Alpala copper/gold/silver deposit at the Cascabel project has the potential to support a large-scale, low-cost underground block cave mining operation with the associated processing and project infrastructure facilities. The operation will sustain commercial production over a mine life of more than 55 years, depending on the production scenario finally adopted.

Four production scenarios have been assessed. Case 1 involves a 40-million-tonne-a-year mining operation with a life-of-mine (LoM) of 66 years, and Case 2a involves a 50-million-tonne-a-year mining operation with a staged ramp-up and an LoM of 57 years.

Case 2b involves a 50-million-tonne-a-year operation with a fast production ramp-up and an LoM of five years, while Case 3 involves a 60-million-tonne-a-year mining operation with an LoM of 49 years.

The production-rate scenario proposed for the base case is Case 2b.

The copper concentrator and gold recovery circuit proposed for Alpala is based on two parallel lines, with one line built for Phase 1 (ramp-up to 50% nameplate capacity) and a second line to reach 100% nameplate capacity in the case of the 40-million-tonne-a-year and 50-million-tonne-a-year mine production scenarios. Three parallel modules are considered for the 60-million-tonne-a-year scenario.

Metallurgical recoveries to the chalcopyrite copper concentrate for the first 30 years of operation are estimated at between 93.9% and 87.1% for copper, and between 85.4% (high grade) and 49.4% (low grade) for gold (50-million tonnes a year in staged ramp-up), depending on mill feed grades.

Based on the Case 2b scenario, the yearly metal production average for the first 25 years is estimated at 207 000 t of copper, 438 000 oz of gold and 1.4-million ounces of silver in concentrate.

The project will produce high-quality concentrates – 28.2% copper, 22.1 g/t gold and 65.7 g/t silver, which should deliver a sales premium for the concentrates.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $4.1-billion to $4.5-billion, and an internal rate of return ranging from 24.8% to 26.5%, depending on the production-rate scenario.

Payback on initial startup capital ranges from 3.5 years to 3.8 years after the start of construction, depending on the production-rate scenario.

Capital Expenditure
Capital cost estimates for the four cases assessed range from $2.4-billion to $2.8-billion.

Planned Start/End Date
Not stated.

Latest Developments
The prefeasibility study (PFS) for the Alpala project has been delayed.

The company planned to deliver the PFS at the end of the third quarter, but Covid-19-related restrictions have limited physical access to the site, which resulted in geotechnical data not being available to meet the study schedule originally contemplated.

SolGold has said that the PFS is well advanced, with current work focusing on the mine plant and production schedules to allow for the finalisation of tailings and concentrate production.

The developer has indicated that it will aim to complete the study “as soon as possible”.

The PFS will be based on the third mineral resource estimate, announced in April. At a copper-equivalent cutoff grade of 0.21%, the project has a mineral resource of 2.66-billion tonnes at 0.53% copper-equivalent for 9.9-million tonnes of copper, 21.7-million ounces of gold and 92.2-million ounces of silver in the measured and indicated categories.

Key Contracts, Suppliers and Consultants
Wood (minerals processing, materials handling and project infrastructure components of the study); SRK Consulting (resource estimation), SRK Exploration Services (geology); Mining Plus (geotechnical, hydrogeology and mine planning); Knight Píesold (environmental and community studies) and EY (economic analysis).

Contact Details for Project Information
SolGold, tel +61 7 3303 0660 and email info@solgold.com.au.