Copper/gold explorer SolGold’s share price took a beating on Thursday, following media reports about a potential referendum on mining in the Ecuadorian province in which the company’s Cascabel project is located.
The company, however, insisted that its tenure was not at risk and said in a media statement that it continued to receive “full and objective support” from the Ecuadorian government.
SolGold noted that under Ecuadorian law individuals were legally allowed to put forward petitions to the Constitutional Court for the inclusion of specific questions in a future vote. A public hearing would be held next week, where the court would receive arguments from the originator and the counter arguments from interested parties who opposed the validity of the question. Thereafter, the question had to be approved by the Electoral Council in order to be included on future ballot papers for the provinces specified.
“With strong support from the government, the international mining community operating in Ecuador and local communities, SolGold does not expect approval to be forthcoming from either the electorate or the court,” the Aim-listed project developer said.
SolGold recently announced findings from its preliminary economic assessment for the Alpala deposit in the Cascabel project, which indicated that the government and people of Ecuador stood to benefit from $17-billion in taxes, royalties and profit shares.
“SolGold is committed to building an integrated explorer, appraiser and miner in the copper industry in Ecuador, and enjoys the support of two of its major shareholders, Newcrest and BHP,” it said.
SolGold’s share price fell by 28% to 24.26p a share before recouping some losses to trade at 28.85p a share in the afternoon. The stock closed at 33.90p each on Wednesday.