Dual-listed SolGold has received strong responses from leading commodity traders to its recent invitation to submit expressions of interest (EoIs) for the offtake of copper/gold/silver concentrate from its Alpala project, in Ecuador.
The company said the high quality of the concentrate from its flagship project had attracted ten qualifying bids and added that it expected more once the worldwide restrictions, owing to Covid-19, were lifted.
Demand from the traders for the Alpala concentrate was significantly in excess of planned production volumes, SolGold reported.
The company stated that the low deleterious element content of the Alpala concentrate, and the well-balanced combination of sulphur, iron and copper in the concentrate would ensure that Alpala concentrate would be a preferred baseload for prime copper smelters with high gold recovery circuits.
“SolGold will be in the enviable position of choosing from a wide array of suitors for its concentrate, allowing for a competitive bidding process and geographical spread of sales.”
SolGold further said that it had received material offers for funding in exchange for offtake from a number of traders in their recent EoI submissions. Offers included the provision of short-term and longer-term capital with proceeds available for studies, mine construction and cost overruns, as well as working capital during ramp-up.
In parallel with the EoI process, the company has engaged directly with state-of-the-art copper smelters in Canada, China, Europe, India, Japan and Korea known to be able to process high quality concentrate. The reactions have been overwhelmingly positive.
"We expect demand for concentrates to remain strong, with smelter expansions and new-builds in China, Indonesia and Africa likely to outpace supply. Chinese State-owned enterprise copper smelters are intent on decreasing the need for cathode imports and can be expected to continue the trend of building state-of-the-art, environmentally friendly, low cost smelters as demand for copper increases over time. In a post-pandemic world, copper will continue to be the metal of the future supporting growth and innovation, smart transportation and living, antibacterial materials, data-enabled healthcare initiatives and medical advances and working in a world of increasing digital collaboration and entertainment,” said executive general manager of corporate finance Ingo Hofmaier.
SolGold is now ranking and selecting a short-listed group of traders with a view to finalising offtake agreements, as well as funding support. A further update will be released to the market in due course.