PERTH (miningweekly.com) – Mining major BHP has subscribed for a further £45-million worth of shares in copper developer SolGold, which is the majority owner and operator of the Cascabel porphyry copper/gold project, in Ecuador.
BHP will be issued an additional 100-million shares, at a price of 45p each, taking its interest in the company from 6.1% to 11.18%.
The news sent SolGold’s share price surging 20% in early morning trade in London, as investors ready for a potential showdown between BHP and Newcrest over the Ecuador project.
Australian gold major Newcrest is the top shareholder in SolGold with a 14.54% stake.
“Ecuador is a highly prospective region for the next generation of copper supply. This additional investment in SolGold strengthens our strategic position in the Cascabel copper exploration project, and is consistent with BHP’s strategy to replenish our copper resource base and grow the business,” BHP president Minerals Americas, Danny Malchuk said on Tuesday.
SolGold CEO Nick Mather said the company was pleased to have entered this agreement with BHP.
“We believe that the Alpala project is one of the five best undeveloped copper projects in the world. SolGold is intent on taking an aggressive path to the development of this exciting project and BHP’s investment is welcome.
“The strong premium paid and the $59.2-million in funds raised means we can get on with the task of getting to feasibility. SolGold believes that the terms of BHP's investment are favourable to SolGold in the context and will allow SolGold to continue to deliver value to its shareholders.”
Under the subscription agreement, BHP would have the right to nominate one director to the SolGold board, with the company also having anti-dilution rights for a two-year period to allow it to preserve its shareholding at 10%.