SolGold in $2.85bn funding talks for Ecuador project
While work is continuing for the prefeasibility study (PFS) and the proposed definitive feasibility study (DFS) for the Alpala project, in Ecuador, London-listed SolGold has also started discussions about a funding package of about $2.85-billion for the development of the deposit that forms part of its 85%-owned Cascabel project.
The funding requirements involve short-term funding of about $150-million to complete the DFS, as well as about $2.7-billion to fund SolGold’s share of predevelopment costs and longer term development capital expenditure.
In a company update on Wednesday, SolGold said that funding discussions for finalising the DFS and the predevelopment costs were progressing “encouragingly”.
“If an agreement is reached, finalisation and settlement could take up to eight weeks,” SolGold noted.
For the long-term funding, the company is targeting debt packages backed by sovereign export and import credit facilities that are supported by conditional concentrate offtake agreements, plus equity raised from a corporate capital issue at development.
Subject to funding and land acquisition programmes, the PFS will be completed by the third quarter of this year and the DFS by the end of the first quarter next year.
Major miners BHP and Newcrest are large shareholders of SolGold, which estimates that its Ecuador project has a potential 55-year mine life and is among the world’s best undeveloped deposits.
SolGold released its preliminary economic assessment (PEA) on the Alpala project in May 2019 and later updated the PEA report to include wider metal price, capital expenditure and operational expenditure ranges. The revision indicated ranges in net present value from about $2.5-billion to about $6.1-billion.
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