REG - SolGold PLC - Completion of New Cascabel Pre-Feasibility Study

SolGoldAnnouncement

16/02/2024 07:00

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RNS Number : 4186D  SolGold PLC  16 February 2024

16 February 2024

 

SolGold plc

("SolGold" or the "Company")

Announces Successful Completion of New Cascabel Pre-Feasibility Study with
Significantly Reduced Initial Capital Cost and 24% Internal Rate of Return

 

·      $5.4bn pre-tax Net Present Value ("NPV(8%)") and 33% internal
rate of return ("IRR")

·      $3.2bn after-tax NPV(8%), 24% IRR and 4-year payback period from
the start of processing 1  (#_ftn1) (                   )

·      Average production 2  (#_ftn2) of 123ktpa of copper, 277kozpa of
gold and 794kozpa of silver - 182ktpa copper equivalent ("CuEq") 3  (#_ftn3) -
with peak 4  (#_ftn4)  copper production of 216ktpa (370ktpa CuEq)

·      Pre-production capital of $1.55bn for the initial mine
development, first process plant module and infrastructure

·      85% of Mineral Reserves are classified as Proven in updated
Mineral Reserve Estimate

·      Initial 28-year mine plan of 540Mt containing 3.2Mt Cu @ 0.60%,
9.4Moz Au @ 0.54 g/t and 28Moz Ag @ 1.62 g/t based on the updated Mineral
Reserve Estimate 5  (#_ftn5)

·      The Project economics have been calculated based on the economic
terms and conditions previously negotiated with the Ecuadorian Government 6 
(#_ftn6)

 

SolGold (LSE & TSX: SOLG) is pleased to announce the successful completion
of a new Pre-Feasibility Study ("PFS" or "Study"), prepared in accordance with
National Instrument 43-101 ("NI 43-101") that supports a Phased Block Cave
Mine at its flagship Cascabel Project ("Cascabel" or "Project") in Ecuador.
Cascabel is 100%-owned through SolGold's Ecuadorian subsidiary Exploraciones
Novomining S.A. ("ENSA"). All dollar amounts are quoted in US Dollars.

Key Highlights of the Pre-Feasibility Study

·      Excellent economic viability of a Cascabel Phased Approach Block
Cave Mine

·      +$1bn initial capital expenditure savings compared to previous
estimates, reflecting efficient project development strategies, lower
technical risk attributed to the phased strategy

·      Potential for accelerated cash flow and project development

·      The current Cascabel mine plan reflects the profitable
exploitation of only 18% of the Alpala measured and indicated mineral resource
through a 28-year mine life - the size of the entire resource indicates the
mine's potential to be a multi-generational mining asset

·      Strong commitment to responsible and sustainable mining
practices, including the use of renewable energy (hydropower) and an
environmentally conscious Project footprint reduction

Scott Caldwell, SolGold's CEO and President of SolGold Ecuador, commented:

"Cascabel is not just a mining project; it's a promise of responsible mining,
lasting value for all stakeholders and a sustainable legacy for the planet.
With reduced capital needs and lower risk compared to previous approaches,
together with our ongoing commitment to sustainability and responsible mining,
Cascabel is more than copper and gold; it's a story of innovation,
collaboration and a vision for a greener and more prosperous tomorrow for the
people of Ecuador. This Study was conducted with the best outcomes for all our
stakeholders in mind."

Summary of Cascabel PFS Results

Table 1: Economic and Operating Summary

 Key PFS Outcomes (US$)                                          Base Case

 Economic Assumptions  Copper ($/lb)                             $3.85

                       Gold ($/oz)                               $1,750
                       Silver ($/oz)                             $22.50
 Operating Parameters  Throughput                                Phase 1: 12Mtpa; Phase 2: 24Mtpa
                       Initial Project LOM                       28 years
                       Total Ore Mined                           540 Mt
                       Average Copper Grade / Recovery           0.60% | 88.7%
                       Average Gold Grade / Recovery             0.54 g/t | 72.9%
                       Average Silver Grade / Recovery           1.62 g/t | 65.7%
 Production            Total CuEq Produced                       4.3 Mt

                       Total Copper Produced                     2.9 Mt
                       Total Gold Produced                       6.9 Moz
                       Total Silver Produced                     18.4 Moz
                       Annual CuEq Production (peak/average)     370 kt | 182 kt
                       Annual Copper Production (peak/average)   216 kt | 123 kt
                       Annual Gold Production (peak/average)     734 koz | 277 koz
                       Annual Silver Production (peak/average)   1,159 koz | 794 koz
 Capital               Pre-production                            $1.55bn
                       Post-production                           $2.57bn
 Operating Costs       Mining Costs                              $6.2

($/t processed)
                       Processing Costs                          $7.4
                       G&A Costs                                 $1.0
                       Tailings, Port and Infrastructure Costs   $0.7
                       Total Operating Costs                     $15.3
 Cash Costs            LOM Average Net Cash Cost ($/lb Cu)       $0.25
                       LOM Average AISC ($/lb Cu)                $0.69
 Financials            Pre-tax NPV(8%) / IRR                     $5.4bn | 33%
                       After-tax NPV(8%) / IRR                   $3.2bn | 24%
                       Capital payback period                    4 years
                       Average Annual Free Cash Flow             $449m

                       (first 5 years of production)
                       First 10-Years Free Cash Flow Generation  $7.1bn

Reduced Initial Capital Expenditure

Compared to previously considered development scenarios, the Phased Approach
Block Cave Mine has substantially reduced the initial capital expenditure
required to develop Cascabel. This approach optimizes project development by
gradually scaling up operations, effectively managing costs and minimizing
financial risk.

 

After a ramp-up period of approximately two years, the initial block cave will
achieve a production rate of 12 million tonnes per annum ("Mtpa"). The initial
cave will extract high-grade ore, averaging approximately 1.45% CuEq for the
first ten years of production. The extraction of this high-grade material will
not sterilize the surrounding lower-grade ore. The mining operations will be
expanded by an additional 12Mtpa, increasing to a total annual production rate
of 24Mtpa in year 6. The phase 2 mill expansion is expected to be entirely
funded from Project cash flow. This phased approach also allows for scaling
other capital items over time, such as the tailings storage facility, the camp
and mining equipment.

Lower Technical Risk

The phased development strategy also contributes to a reduction in technical
risk. Incrementally advancing the Project provides an opportunity to implement
and fine-tune mining and processing methodologies, ensuring a more efficient
and stable production process. This approach enhances the Project's overall
resilience and minimizes potential challenges associated with large-scale
development. A practical height-of-draw for this deposit was determined to be
400m which is considered to be more technically feasible than other
alternatives.

Accelerated Cash Flow

The Study's results indicate a strong potential for accelerated cash flow
generation. With a reduced initial capital burden and lower technical risk,
Cascabel is expected to deliver a quicker path to positive cash flow.

Commitment to Responsible Mining

SolGold remains committed to responsible and sustainable mining practices. The
Company's dedication to environmental, social and governance (ESG) standards
remains unwavering. Cascabel's development will continue to prioritize
minimizing environmental impact, promoting community engagement and ensuring
ethical practices throughout the Project's lifecycle.

Integration of Renewable Energy

SolGold is proud to prioritize sustainability and environmental responsibility
in the development of the Cascabel Project. The Company is actively
integrating renewable energy supplied by governmental and private sources into
the Project's energy supply strategy as part of a net zero commitment.

Project Description

Cascabel is located in northern Ecuador approximately a three hours' drive
north of Quito, the capital city of Ecuador. Access is via sealed highways
through the closest major centre of Ibarra, located approximately 80 km south
of the property. Infrastructure in the region and throughout Ecuador is
generally of a high standard, with excellent road access, power and water
sources readily available in the local area.

Cascabel Project - Alpala Underground: Mineral Resource Estimate ("MRE") #4

 

Table 2: Cascabel Project Alpala Underground Mineral Resource Estimate
(Effective Date November 11, 2023)

 Cut-Off Grade  Resource Category     Tonnage  Grade                       Contained Metal

 (CuEq%)                              (Mt)
                CuEq                           Cu          Au      Ag      CuEq   Cu     Au      Ag

                (%)                            (%)         (g/t)   (g/t)   (Mt)   (Mt)   (Moz)   (Moz)
 0.21           Measured              1,576    0.64  0.43  0.35    1.16    10.0   6.7    17.5    58.6
                Indicated             1,437    0.39  0.28  0.20    0.71    5.6    4.0    9.3     32.7
                Measured + Indicated  3,013    0.52  0.35  0.28    0.94    15.6   10.7   26.8    91.3
                Inferred              607      0.36  0.26  0.19    0.56    2.2    1.5    3.7     11.0

Notes:

1.     Dr Arseneau, P. Geo. Associate Consultant with SRK Consulting
(Canada) is responsible for this Mineral Resource statement and is an
"independent Qualified Person" as such term is defined in NI 43-101.

2.     Reasonable prospects of eventual economic extraction were assessed
by enclosing the mineralised material in the block model estimate in a 3D
wireframe shape that was constructed with adherence to a minimum mining unit
with geometry appropriate for a block cave.

3.     The cut-off grade for the shape was defined as the cut-off grade
under a breakeven, eventual economic extraction criterion. The cut-off grade
of 0.21% CuEq was calculated using (copper grade (%)) + (gold grade (g/t) x
0.683).

4.     All material within this shape was reported in the Mineral Resource
statement as block caving is a non-selective method, and all material
extracted is treated as mill feed.

5.     The material inside the shape without a Mineral Resource category
was reported as planned dilution.

6.     The resulting shape contained planned internal and edge dilution
that the QP considers appropriate.

7.     Cut-off inputs included:

a.     Metal prices of Cu at US$3.60/lb and Au at US$1,700/oz,

b.     Recoveries of Cu 93% and Au 83%,

c.     Costs including mining, processing, general and administration
(G&A), and off-site realization (TCRC), including royalties.

8.     The QP considers that the Mineral Resource has reasonable prospects
for eventual economic extraction by an underground mass mining method such as
block caving.

9.     Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.

10.   Mineral Resources are reported inclusive of Mineral Reserves.

11.   Figures may not add up due to rounding.

Cascabel Project - Alpala Underground: Mineral Reserve Estimate

The Mineral Reserves have been estimated for a block caving method and take
into account the effect of mixing indicated material with dilution from
low-grade or barren material originating from within the caved zone and the
overlying cave backs. The Mineral Resources reflected in MRE#4 are inclusive
of the Mineral Reserve estimate, which represents only 18% of the Measured and
Indicated Resource estimate. The mining practices contemplated in this study
do not compromise the potential extraction of the remaining resources not
included in the current mine plan.

 

Table 3: Cascabel Project Alpala Underground Mineral Reserve Estimate

 

 Mineral Reserve Category  Tonnage  Grade                 Contained Metal

                           (Mt)
                           Cu             Au      Ag      Cu      Au      Ag

                           (%)            (g/t)   (g/t)   (Mt)    (Moz)   (Moz)
 Proven                    457.5    0.64  0.60    1.7     2.9     8.9     24.9
 Probable                  82.2     0.36  0.22    1.2     0.3     0.6     3.1
 Total                     539.7    0.60  0.54    1.6     3.2     9.4     28.0

Notes:

1.     CIM Definition Standards were followed for Mineral Reserves.

2.     Mineral Reserves for the Cascabel Project have an effective date of
December 31, 2023

3.     The Mineral Reserve reported above was not additive to the Mineral
Resource.

4.     The Mineral Reserve is based on the November 11, 2023 Mineral
Resource.

5.     Totals may not match due to rounding.

6.     Mineral Reserves are reported using long-term metal prices of
US$1,700/oz Au, US$3.60/lb Cu, US$19.90/oz Ag.

7.     Mineral Reserves are constrained within a block cave design, using
the following input parameters: height of draw of 400 m; mixing horizon of 350
m; 15% dilution (at 350 m column height); overall operating cost of
US$15.00/t; metallurgical recoveries that range from 85-92% for copper and
70-81% for gold; a footprint development cost of US$1,750/m2; cut-off value of
US$15.00/t.

8.     Units are metric tonnes, metric grams, troy ounces and imperial
pounds. Gold ounces and copper pounds are estimates of in-situ material and do
not account for processing losses.

9.     The Mineral Reserve Estimate as of 31 December 2023 for Alpala
was independently verified by Jarek Jakubec, C.Eng., FIMMM. Mr.
Jakubec fulfils the requirements to be a "Qualified Person" for the purposes
of NI 43-101 and is the Qualified Person under NI 43-101 for the Mineral
Reserve.

Mining

Underground mining will utilize the block cave mining method, a low-cost, bulk
mining method. After a ramp-up period of approximately two years, the initial
cave will achieve a production rate of 12Mtpa. The initial cave will extract
high-grade ore, averaging 1.5% CuEq for the first ten years of operation.
Extraction of this high-grade material will not sterilize surrounding
lower-grade ore. The mining operations will be expanded by an additional
12Mtpa, increasing to a total annual production rate of 24Mtpa in year 6 of
mine production.

 

Ore from the mine will be transported to the underground primary crushers by
load haul dump loaders ("LHDs") and crushed to minus 160 mm. The crushed ore
will be conveyed directly to the coarse ore stockpile adjacent to the mill at
the surface.

Process Plant

Ore will be reclaimed from the coarse ore stockpile and conveyed to a
conventional semi-autogenous grinding ball mill crusher ("SABC") circuit.
Slurry from the ball mill will be pumped to the flotation circuit, where
concentrate will be floated, filtered and stored for transport by truck to the
port site concentrate storage barn. Tailings will flow by gravity to the
Tailings Storage Facility.

Production Plan

Additional mining optimization studies indicated that the optimum production
profile for the Cascabel Project is, to begin with a processing rate of
12Mtpa, extracting high-grade ore for 6 years, and then expanding the process
plant by an additional 12Mtpa, increasing to a total processing rate of
24Mtpa. The initial 12Mtpa throughput rate is expected to be achieved six
years after the start of Project development. Over the current life of mine,
the plant is expected to produce 2.9 million tonnes of copper, 6.9 million
ounces of gold and 18.4 million ounces of silver.

Tandayama-Ameríca (TAM) Deposit

The TAM deposit, located approximately 6 kilometres northeast of the Apala
deposit, further emphasizes the significant potential of the Cascabel Project.
The TAM deposit outcrops at the surface, resulting in a low strip ratio,
offering an excellent opportunity to provide additional mill feed for up to 7
years and the potential for an earlier start of metal production from an
open-cut mining method.

 

The current evaluation of the TAM deposit is not at a PFS level and is,
therefore, not included in the Cascabel Project economics presented above or
in the PFS mine plan. The Company will begin the additional metallurgical
testing, waste rock characteristic testing, geotechnical, hydrogeology, and
detailed mine planning required to finalize planning efforts.

 

Table 4: Tandayama-Ameríca Mineral Resource Statement (Effective Date
November 11, 2023)

 

 Potential       Cut-off Grade (CuEq %)  Resource Category  Tonnage (Mt)  Grade             Contained Metal

 Mining Method
                 Cu                                         Au                  CuEq        Cu      Au      CuEq

                 (%)                                        (g/t)               (%)         (Mt)    (Moz)   (Mt)
                                         Indicated          492           0.22  0.20  0.35  1.1     3.1     1.7

 Open Pit        0.16
                 Inferred                                   45            0.18  0.18  0.31  0.1     0.3     0.1
 Underground     0.19                    Indicated          230           0.26  0.18  0.39  0.6     1.3     0.9
                 Inferred                                   201           0.21  0.21  0.36  0.4     1.4     0.7
 Total Indicated                                            722           0.23  0.19  0.36  1.7     4.5     2.6
 Total Inferred                                             247           0.21  0.21  0.35  0.5     1.6     0.9

Notes:

1.     Dr. Gilles Arseneau, P. Geo., Associate Consultant with SRK
Consulting (Canada), is responsible for this Mineral Resource statement and is
an "independent Qualified Person" as such term is defined in NI 43-101.

2.     Reasonable prospects of eventual economic extraction were assessed
by:

a.     First presenting the mineralised material in the block model
estimate to a conventional Lersch-Grossman open pit optimisation routine based
on a cut-off grade of 0.16 % CuEq, and the cost and revenue assumptions listed
below. Mineralised material inside the revenue factor one pit and above the
cut-off grade were then reported in the "Open pit" section of the Mineral
Resource statement.

b.     Subsequently, the remaining material was enclosed in a 3D wireframe
shape that was constructed with adherence to a minimum mining unit with
geometry appropriate for a block cave.

3.     The Cut-off grade for the underground shape was defined as the
cut-off grade under a breakeven, eventual economic extraction criterion. The
cut-off grade of 0.19% CuEq was calculated using (copper grade (%)) + (gold
grade (g/t) x 0.683).

4.     All material within the underground shape was reported in the
"Underground" section of the Mineral Resource statement, as block caving is a
non-selective method, and all material extracted is treated as mill feed.

5.     The resulting shape contained planned internal and edge dilution
that the QP considers appropriate.

6.     Cut-off/Cut-off inputs included:

a.   Metal prices of Cu at US$3.60/lb and Au at US$1,700/oz,

b.   Recoveries of Cu 93% and Au 83%,

c.   Costs including mining, processing and general and administration
(G&A) and

d.   Off-site realization (TCRC), including royalties.

7.     The QP considers that the Mineral Resource has reasonable prospects
for eventual economic extraction by open pit or an underground mass mining
method such as block caving, as presented in the Mineral Resource statement.

8.     Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.

9.     Mineral Resources are reported inclusive of those Mineral Resources
that were converted to Mineral Reserves.

10.  Numbers may not add up due to rounding.

Environmental, Social and Governance ("ESG")

SolGold's unwavering commitment to the highest social and environmental
sustainability of our projects positions the Company as a leading advocate of
responsible mining practices, particularly in Ecuador. As SolGold advances the
Cascabel Project, we remain dedicated to the highest transparency standards
and ESG principles.

In line with our corporate values, SolGold has established a comprehensive
framework encapsulating the following key ESG criteria:

·      Environment: We are deeply committed to managing our carbon
footprint and maximizing the use of renewable resources. We aim to minimize
the ecological impact of our operations and contribute to a cleaner
environment and biodiversity conservation.

·      Social: SolGold champions diversity and equitable wages within
our workforce. We believe that fostering an inclusive workplace and ensuring
fair compensation are fundamental to the well-being of our employees and the
communities in which we operate.

·      Governance: SolGold is dedicated to adhering to the highest
standards of governance practices. We stand for transparency, integrity, and
accountability in all our operations, aligning ourselves with global best
practices.

Over the past decade, we have forged robust community partnerships in Ecuador
underpinned by extensive engagement efforts. These relationships underscore
our commitment to responsible resource development and mutual prosperity.

In accordance with Ecuadorian law, an Environmental and Sustainability Impact
Assessment ("EISA") is required before obtaining authorization for
construction and operations. SolGold is committed to ensuring the EISA is
aligned with international standards. These standards encompass the Equator
Principles, the International Finance Corporation ("IFC") Performance
Standards, Environmental, Health, and Safety Guidelines, as well as the
Sustainable Development Goals ("SDG"), as well as other international
standards that apply to the mining sector.

Furthermore, SolGold will undertake a comprehensive evaluation to manage and
reduce the project's overall carbon footprint. Our initiatives will encompass
maximizing the utilization of renewable energy sources, exploring
electrification of mobile and fixed equipment options, optimizing operational
efficiency through process integration and other innovative strategies to
minimize our environmental footprint.

Our commitment to ESG principles remains unwavering, and we are dedicated to
ensuring that the Cascabel Project sets the benchmark for responsible and
sustainable mining practices in Ecuador and beyond.

Sensitivity Analysis

A sensitivity analysis was performed on the Study's after-tax NPV(8%) to
examine the sensitivity to commodity prices, capital costs and operating
costs.

Figure 1: After-tax NPV(8%) Sensitivity to Changes in Project Parameters

 

 

Figure 2: Metal Price and Discount Rate Sensitivity

Outstanding Opportunities and Upside Options

Opportunities for further optimization of the Cascabel Project that management
will continue to investigate include:

·      Process plant design optimization following additional
metallurgical test work focusing on improved gold recovery and other
by-product recovery

·      Viability of the TAM open-cut mine to provide early mill feed

·      Continue to examine the impacts of utilizing tunnel boring
technology to accelerate underground development

·      Further define the economic benefits of renewable energy, such as
hydro and solar, on the project

·      Continue to examine the economic impact of the sub-level cave
mining method on the upper portions of the Alpala deposit

·      Process plant design optimization following additional
metallurgical test work

Next Steps

SolGold intends to release a NI 43-101 technical report on Cascabel within 45
days of this release (the "Technical Report").

SolGold expects to commence the technical work to further advance and de-risk
the Cascabel Project.

Qualified Persons

The Qualified Persons for the "Cascabel Project, Ecuador, NI 43-101 Technical
Report on Pre-Feasibility Study", which has an effective date of December 31,
2023, are detailed in the table below.

 

 Category                                           Name                                      Company
 Mineral Resource Estimate                          Dr. Gilles Arseneau, P. Geo.              SRK Consulting (Canada) Inc.
 Mineral Reserve Estimate and Mining (Underground)  Jarek Jakubec, C.Eng., FIMMM              SRK Consulting (Canada) Inc.
 Mining (Open Pit Tandayama)                        Scott Wilson, CPG, SME Registered Member  Resource Development Associates Inc.
 Environment, Social, Tailings & Water              Tim Rowles, BSc MSc FAusIMM CP RPEQ       Knight Piésold Pty Ltd
 Metallurgy & Process Plant                         Ben Adaszynski, P.Eng                     Sedgman Canada Ltd.
 Surface Infrastructure                             Richard Boenke, P.Eng                     JDS Energy and Mining Inc.
 Financial Evaluation and Marketing                 Carl Kottmeier, P.Eng                     SRK Consulting (Canada) Inc.

 

 This announcement was approved for release by Scott Caldwell-Chief Executive
Officer.

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

CONTACTS

 Scott Caldwell

 SolGold Plc (CEO)             Tel: +44 (0) 20 3807 6996

 Tavistock (Media)

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

ABOUT SOLGOLD

SolGold is a leading resources company focused on the discovery, definition,
and development of world-class copper and gold deposits and continues to
strive to deliver objectives efficiently and in the interests of shareholders.

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
environmental impact.

SolGold is listed on the London Stock Exchange and Toronto Stock Exchange
(LSE/TSX: SOLG).

See www.solgold.com.au (http://www.solgold.com.au) for more information.
Follow us on "X" @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". 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.sedarplus.ca
(http://www.sedarplus.ca) . 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 findings in the PFS and the implementation of the Cascabel project are
subject to all the necessary approvals, permits, internal and regulatory
requirements and further works. The estimates are indicative only and are
subject to market and operating conditions. They should not be interpreted as
guidance. The information contained herein is a summary only and is qualified
in its entirety by reference to the Technical Report (as defined herein).

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.

The Company recognises that the term World Class is subjective and for the
purpose of the Company's projects the Company considers the drilling results
at the Alpala porphyry copper-gold deposit at its Cascabel project to
represent intersections of a World Class deposit on the basis of comparisons
with other drilling intersections from World Class deposits, some of which
have become, or are becoming, producing mines and on the basis of available
independent opinions which may be referenced to define the term "World Class"
(or "Tier 1").

The Company considers that World Class deposits are rare, very large, long
life, low cost, and are responsible for approximately half of total global
metals production. World Class deposits are generally accepted as deposits of
a size and quality that create multiple expansion opportunities and have or
are likely to demonstrate robust economics that ensure development
irrespective of position within the global commodity cycles, or whether or not
the deposit has been fully drilled out, or a feasibility study completed.

Standards drawn from industry experts (1Singer and Menzie, 2010; 2Schodde,
2006; 3Schodde and Hronsky, 2006; 4Singer, 1995; 5Laznicka, 2010) have
characterised World Class deposits at prevailing commodity prices. The
relevant criteria for World Class deposits, adjusted to current long run
commodity prices, are considered to be those holding or likely to hold more
than 5 million tonnes of copper and/or more than 6 million ounces of gold with
a modelled net present value of greater than US$1billion.

The Company cautions that the Cascabel Project remains an early-stage project
at this time and there is inherent uncertainty relating to any project at
prior to the determination of pre-feasibility study and/or defined feasibility
study.

On this basis, reference to the Cascabel Project as "World Class" (or "Tier
1") is considered to be appropriate.

 

 1  (#_ftnref1) Based on long-term commodity price assumptions of (US$):
$3.85/lb for copper, $1,750/oz for gold and $22.50/oz for silver.

 2  (#_ftnref2) Average based on years 6 - 23 at full nameplate capacity.

 3  (#_ftnref3) Assumptions for copper equivalent calculations as provided in
Table 1 for commodity prices, grades and recoveries. Copper equivalent
production (by-product basis) = Recovered Cu tonnes + (Au Price US$/oz) / (Cu
Price US$/t) x (Recovered gold ounces) + (Ag Price US$/oz) / (Cu Price US$/t)
x (Recovered silver ounces).

 4  (#_ftnref4) Peak based on year 6 from start of production.

 5  (#_ftnref5) See Table 3: Cascabel Project Alpala Underground Mineral
Reserve Estimate for details including cut-off assumptions.

 6  (#_ftnref6) See SolGold press release dated 20 July 2023 for additional
details.

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