REG - SolGold PLC - Cascabel Investment Protection Agreement

SolGoldAnnouncement

23/11/2021 07:05

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RNS Number : 2468T  SolGold PLC  23 November 2021

23 November 2021

SolGold plc

("SolGold" or the "Company")

Cascabel Investment Protection Agreement

 

The Board of Directors of SolGold (LSE & TSX: SOLG) is pleased to announce
the signing of a preliminary commitment declaration with regard to an
Exploration Investment Protection Agreement ("IPA") for the Cascabel project
in northern Ecuador. The declaration was signed on 19(th) November 2021 in
Quito, Ecuador between Mr. Guillermo Lasso Mendoza, President of Ecuador, and
Mr. Andrew Taunton, Vice President of SolGold's Ecuador subsidiaries
representing SolGold plc and SolGold Finance AG (together the "Investors"),
and Exploraciones Novomining S.A. and SolGold-Ecuador S.A. (together the
"Receiving Companies").

The terms of the IPA, submitted by application to the Ministry of Production,
Foreign Trade, Investments and Fisheries ("MPCEIP") of Ecuador, includes an
intention to invest a total of approximately US$430 million over the 10 years
between 2013 and 2023 in minerals exploration activities in the Cascabel
mining concession, in the canton of Ibarra, province of Imbabura, Ecuador. The
US$430 million total includes both historical investments, with a total of
approximately US$238 million estimated through to the end of 2021, and planned
future investments through to the end of 2023 when the Exploration Phase of
activities as defined under the mining law is anticipated to finish.

On 30(th) August 2021, the Strategic Committee for the Promotion and
Attraction of Investments ("CEPAI"), the body in charge within the MPCEIP,
analysed the legal and technical reports required to approve the SolGold
application  by the Investors and Receiving Companies and, by means of
Resolution No. 065-CEPAI-2021, and with the unanimous vote of its members,
recommended the execution of the IPA. In this context, the undersigned parties
confirmed the commitment between the Ecuadorian State, the Investors and the
SolGold Receiving Companies to execute the above-mentioned Exploration IPA in
compliance with Ecuadorian law.

Once the IPA has been executed, the Ecuadorian State will grant the SolGold
investor companies the applicable protections and guarantees in accordance
with the law. Specific protections relate to the prohibition of all forms of
confiscation, non-discriminatory treatment and equal playing field, legal
security, tax stability for 15 years and international arbitration in London
if there are any disputes in relation to the Cascabel Project. The SolGold
Receiving Companies intend to disburse the planned future investments in
exploration activities related to the Cascabel Project and to create among
other benefits, direct and indirect employment over the next two years.

SolGold's Acting CFO Ingo Hofmaier commented on the IPA:

"Under the terms of this Agreement, SolGold's investors will enjoy increased
protection of their key investment in Ecuador. As a firm we are delighted to
be able to further deepen our relationship with the State of Ecuador and
achieve another milestone in advancing Cascabel. Agreements like this create
an alliance between the private sector and the state, critical in supporting
large amounts of future investments. This was a major effort by the parties
involved and the inclusion of a well drafted dispute resolution clause, with
arbitration in London abiding to the rules of the International Chamber of
Commerce will provide us with confidence for the upcoming project finance
process."

 

By order of the Board

Dennis Wilkins

Company Secretary

 

CONTACTS

 

 Dennis Wilkins

 SolGold Plc (Company Secretary)                                                  Tel: +61 (0) 417 945 049

 dwilkins@solgold.com.au (mailto:dwilkins@solgold.com.au)

 Ingo Hofmaier

 SolGold Plc (Acting CFO)                                                         Tel: +44 (0) 20 3823 2130
  ihofmaier@solgold.com.au (mailto:ihofmaier@solgold.com.au)

 Fawzi Hanano / Lia Abady

 SolGold Plc (Investors / Communication)                                          Tel: +44 (0) 20 3823 2130

 fhanano@solgold.com.au (mailto:fhanano@solgold.com.au) / labady@solgold.com.au
 (mailto:labady@solgold.com.au)

 Tavistock (Media)

 Jos Simson / Gareth Tredway                                                      Tel: +44 (0) 20 7920 3150

 

Follow us on twitter @SolGold_plc

 

Certain information contained in this announcement would have been deemed
inside information.

 

ABOUT SOLGOLD

SolGold is a leading resources company focussed on the discovery, definition
and development of world-class copper and gold deposits. In 2018, SolGold's
management team was recognised by the "Mines and Money" Forum as an example of
excellence in the industry and continues to strive to deliver objectives
efficiently and in the interests of shareholders. SolGold is aggressively
exploring the length and breadth of this highly prospective and gold-rich
section of the Andean Copper Belt which is currently responsible for c40% of
global mined copper production.

The Company operates with transparency and in accordance with international
best practices. SolGold is committed to delivering value to its shareholders,
while simultaneously providing economic and social benefits to impacted
communities, fostering a healthy and safe workplace and minimizing the
environmental impact.

Dedicated stakeholders

SolGold employs a staff of over 800 employees of whom 98% are Ecuadorean. This
is expected to grow as the operations expand at Alpala, and in Ecuador
generally. SolGold focusses its operations to be safe, reliable and
environmentally responsible and maintains close relationships with its local
communities. SolGold has engaged an increasingly skilled, refined and
experienced team of geoscientists using state of the art geophysical and
geochemical modelling applied to an extensive database to enable the delivery
of ore grade intersections from nearly every drill hole at Alpala. SolGold has
over 80 geologists on the ground in Ecuador exploring for economic copper and
gold deposits.

About Cascabel and Alpala

The Alpala deposit is the main target in the Cascabel concession, located on
the northern section of the heavily endowed Andean Copper Belt, the entirety
of which is renowned as the base for nearly half of the world's copper
production. The project area hosts mineralisation of Eocene age, the same age
as numerous Tier 1 deposits along the Andean Copper Belt in Chile and Peru to
the south. The project base is located at Rocafuerte within the Cascabel
concession in northern Ecuador, an approximately three-hour drive on sealed
highway north of the capital Quito, close to water, power supply and Pacific
ports.

Having fulfilled its earn-in requirements, SolGold is a registered shareholder
with an unencumbered legal and beneficial 85% interest in ENSA (Exploraciones
Novomining S.A.) which holds 100% of the Cascabel concession covering
approximately 50km(2). The junior equity owner in ENSA is required to repay
15% of costs since SolGold's earn in was completed, from 90% of its share of
distribution of earnings or dividends from ENSA or the Cascabel concession. It
is also required to contribute to development or be diluted, and if its
interest falls below 10%, it shall reduce to a 0.5% NSR royalty which SolGold
may acquire for US$3.5million.

SolGold's Regional Exploration Drive

SolGold is using its successful and cost-efficient blueprint established at
Alpala, and Cascabel generally, to explore for additional world class copper
and gold projects across Ecuador. SolGold is the largest and most active
concessionaire in Ecuador.

The Company wholly owns four other subsidiaries active throughout the country
that are now focussed on thirteen high priority gold and copper resource
targets, several of which the Company believes have the potential, subject to
resource definition and feasibility, to be developed in close succession or
even on a more accelerated basis compared to Alpala.

SolGold is listed on the London Stock Exchange and Toronto Stock Exchange
(LSE/TSX: SOLG). The Company has on issue a total of 2,293,816,433 fully paid
ordinary shares and 34,250,000 share options.

See www.solgold.com.au (http://www.solgold.com.au) for more information.
Follow us on twitter @SolGold plc

CAUTIONARY NOTICE

News releases, presentations and public commentary made by SolGold plc (the
"Company") and its Officers may contain certain statements and expressions of
belief, expectation or opinion which are forward looking statements, and which
relate, inter alia, to interpretations of exploration results to date and the
Company's proposed strategy, plans and objectives or to the expectations or
intentions of the Company's Directors, including the plan for developing the
Project currently being studied as well as the expectations of the Company as
to the forward price of copper.  Such forward-looking and interpretative
statements involve known and unknown risks, uncertainties and other important
factors beyond the control of the Company that could cause the actual
performance or achievements of the Company to be materially different from
such interpretations and forward-looking statements.

Accordingly, the reader should not rely on any interpretations or
forward-looking statements; and save as required by the exchange rules of the
TSX and LSE or by applicable laws, the Company does not accept any obligation
to disseminate any updates or revisions to such interpretations or
forward-looking statements.  The Company may reinterpret results to date as
the status of its assets and projects changes with time expenditure, metals
prices and other affecting circumstances.

This release may contain "forward‑looking information" within the meaning of
applicable Canadian securities legislation.  Forward‑looking information
includes, but is not limited to, statements regarding the Company's plans for
developing its properties.  Generally, forward‑looking information can be
identified by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved".

Forward‑looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be materially
different from those expressed or implied by such forward‑looking
information, including but not limited to: transaction risks; general
business, economic, competitive, political and social uncertainties; future
prices of mineral prices; accidents, labour disputes and shortages and other
risks of the mining industry.  Although the Company has attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other factors
that cause results not to be as anticipated, estimated or intended.  There
can be no assurance that such information will prove to be accurate, as actual
results and future events could differ materially from those anticipated in
such statements.  Factors that could cause actual results to differ
materially from such  forward-looking information include, but are not
limited to, risks relating to the ability of exploration activities (including
assay results) to accurately predict mineralization; errors in management's
geological modelling and/or mine development plan; capital and operating costs
varying significantly from estimates; the preliminary nature of visual
assessments; delays in obtaining or failures to obtain required governmental,
environmental or other required approvals; uncertainties relating to the
availability and costs of financing needed in the future; changes in equity
markets; inflation; the global economic climate; fluctuations in commodity
prices; the ability of the Company to complete further exploration activities,
including drilling; delays in the development of projects; environmental
risks; community and non-governmental actions; other risks involved in the
mineral exploration and development industry; the ability of the Company to
retain its key management employees and skilled and experienced personnel; and
those risks set out in the Company's public documents filed on SEDAR at
www.sedar.com (http://www.sedar.com) . Accordingly, readers should not place
undue reliance on forward‑looking information. The Company does not
undertake to update any forward-looking information, except in accordance with
applicable securities laws.

The Company and its officers do not endorse, or reject or otherwise comment on
the conclusions, interpretations or views expressed in press articles or
third-party analysis, and where possible aims to circulate all available
material on its website.

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