Franco-Nevada and Osisko to provide $750 million for SolGold's Ecuador project (updated)

OR Royalties

15/07/2024 12:44

(Adds details on the project and background between paragraphs
2-6)
       July 15 (Reuters) - Canadian firms Franco-Nevada
 FNV.TO  and Osisko Gold Royalties  OR.TO  will invest $750
million in SolGold's  SOLG.L   SOLG.TO  under-development
Cascabel gold and copper project in Ecuador in exchange for a
portion of the gold produced from the mine, the companies said
on Monday. 
    The funding will be provided in two phases, with the first
$100 million allowing SolGold to conduct feasibility studies and
secure the necessary permits to make a final investment decision
on the project, which is expected to cost $1.55 billion to
build.  
    The remaining $650 million will fund the construction of the
project, located in the northern Ecuadorean province of
Imbabura, which is considered a major deposit of gold, copper
and silver.
        Franco-Nevada and Osisko would provide 70% and 30% of
the total investment, respectively.
  
        The companies will receive a combined 20% of the
recovered gold until SolGold has provided 750,000 ounces of
gold. 
    Following this milestone, the percentage will reduce to 12%
for the life of the mine, SolGold said. 
    In June, Ecuador signed a contract with SolGold for the
development of the project, which is expected to generate an
investment of over $4.2 billion during its 28 years of
operation, according to Ecuador's energy ministry. 
        Australia's BHP Group  BHP.AX , Gold miner Newmont
 NEM.N  through Newcrest and China's Jiangxi Copper  600362.SS 
own stakes in SolGold, according to LSEG data.
       
  
         
  

 (Reporting by Sourasis Bose in Bengaluru; Editing by Tasim
Zahid)
 ((Sourasis.Bose@thomsonreuters.com;))