REG - SolGold PLC - Pre-Feasibility Study Update - Alpala Project

SolGoldAnnouncement

30/09/2020 07:00

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RNS Number : 5620A  SolGold PLC  30 September 2020

30 September 2020

 

SolGold plc

("SolGold" or the "Company")

 

PFS Update - Alpala Project,
Cascabel Concession, Northern Ecuador

 

The Board of Directors of SolGold (LSE & TSX: SOLG) wishes to provide an
update regarding the completion of the Pre-feasibility Study ("PFS") on the
Alpala Project in the Cascabel concession in northern Ecuador (SolGold 85%).

 

SolGold planned a fast delivery of a PFS for completion at the end of Q3 2020.
The PFS work program has advanced over the last 18 months, however, the COVID
restrictions have limited physical access to site.  This has resulted in
critical geotechnical data not being available as required to meet the study
plan and schedule as originally contemplated.  SolGold has been working to
recover lost time as a result of restrictions and is now in a position to
update the market in respect of the schedule to completion.

 

The PFS is well advanced, and the Company provides the following details with
regard to status and completion plans:

 

Ø Updated Mineral Resource Estimate (MRE#3) that forms the basis of the PFS
study is complete and was announced on 7 April 2020. There have been no
changes to MRE#3.

Ø Geotechnical sampling and testing together with geotechnical domain
identification and modelling have represented a significant source of delays
and have impacted reliant activities in interpretation and mine planning and
extraction models.  Collection of the necessary data has now been completed.

Ø Geotechnical numerical modelling is in the final stages with fragmentation,
caveability and stability inputs ready to be fed into the draft PFS mine model
and design.

Ø The hydrogeological model is currently being finalised with the final
layout of mine infrastructure (finalisation of ventilation design) required to
complete the study.

Ø Mine design is currently being completed and work is focussed on finalising
the development and mining production schedules including the planned
underground infrastructure.

Ø Detailed metallurgy appraisal to a PFS standard is being finalised.

Ø Process plant design (including equipment selection) and its location and
layout are also in the process of being finalised with the final input being
the mine production schedule.

Ø Planned tailings storage facility locations considered for the study are in
the process of being finalised.  The outstanding input required is the plant
production schedule that is used in tailings deposition modelling which allows
completion of the tailing's storage facility design. This will be available
for inclusion in the PFS once the production schedule is finalised.

Ø Pipeline routes are being evaluated for the concentrate from Cascabel site
to the planned port facility.  Pipeline infrastructure options for the PFS
will be finalised for the PFS when the plant production schedule is
complete.

Ø Port storage, dewatering and ship loading designs are being finalised for
inclusion in the PFS.

Ø Environment and community studies are close to completion.

Ø Market studies are close to completion.

 

Work is currently focused on the mine and plant production schedules to allow
finalisation of tailings and concentrate production. This will allow CAPEX and
OPEX numbers to be finalised. These are critical items that are required to
complete the economic analysis.

 

All efforts are concentrated on completing the outstanding items. A detailed
review process will be undertaken to ultimately deliver a confident economic
model.

 

SolGold is focussed on delivery of all draft input from the studies referred
to above as soon as possible. Following a review and revision period,
financial modelling will be undertaken in order to complete the PFS as soon as
possible.

 

 

By order of the Board

Karl Schlobohm

Company Secretary

 

 

Qualified Persons:

 

Information in this report relating to technical disclosure is based on data
reviewed by Mr Jason Ward ((CP) B.Sc. Geol.), the Chief Geologist of the
Company. Mr Ward is a Fellow of the Australasian Institute of Mining and
Metallurgy, holds the designation FAusIMM (CP), and has in excess of 20 years'
experience in mineral exploration and is a Qualified Person for the purposes
of the relevant LSE and TSX Rules. Mr Ward consents to the inclusion of the
information in the form and context in which it appears.

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of the Regulation (EU) No
596/2014 until the release of this announcement.

 

 

 

 

 

 

 

CONTACTS

 Nicholas Mather                                                               Tel: +61 (0) 7 3303 0665

 SolGold Plc (Chief Executive Officer) nmather@solgold.com.au
 (mailto:nmather@solgold.com.au)

 Karl Schlobohm

 SolGold Plc (Company Secretary)                                               Tel: +61 (0) 7 3303 0661

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

 Ingo Hofmaier

 SolGold Plc (GM - Project & Corporate Finance) ihofmaier@solgold.com.au       Tel: +44 (0) 20 3823 2131
 (mailto:kschlobohm@solgold.com.au)

 Gordon Poole / Nick Hennis

 Camarco (Financial PR / IR)                                                   Tel: +44 (0) 20 3757 4997

 solgold@camarco.co.uk (mailto:solgold@camarco.co.uk)

 Andrew Chubb                                                                  Tel: +44 (0) 20 7907 8500

 Hannam & Partners (Joint Broker and Financial Advisor)

 solgold@hannam.partners (mailto:solgold@hannam.partners)

 Ross Allister / David McKeown                                                 Tel: +44 (0)20 7418 8900

 Peel Hunt (Joint Broker and Financial Advisor)

 solgold@peelhunt.com (mailto:solgold@peelhunt.com)

 James Kofman / Darren Wallace                                                 Tel: +1 416 943 6411

 Cormark Securities Inc. (Financial Advisor)

 dwallace@cormark.com (mailto:dwallace@cormark.com)

Follow us on twitter @SolGold_plc

 

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 the largest and
most active concession holder in Ecuador and is aggressively exploring the
length and breadth of this highly prospective and gold-rich section of the
Andean Copper Belt.

 

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 600 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.

 

Advancing Alpala towards development

The resource at the Alpala deposit contains a high-grade core which will be
targeted to facilitate early cashflows and an accelerated payback of initial
capital. SolGold is currently progressing its Pre-Feasibility Study and is
fully funded through to development decision following the Net Smelter Royalty
Financing with Franco-Nevada Corporation for US$100million. Franco-Nevada will
receive a perpetual 1% NSR interest from the Cascabel licence area.

 

SolGold is currently assessing financing options available to the Company for
the development of the Alpala mine following completion of the Definitive
Feasibility Study.

 

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 2,072,213,495 fully-paid
ordinary shares and 113,175,000 share options.

 

Quality Assurance / Quality Control on Sample Collection, Security and
Assaying

SolGold operates according to its rigorous Quality Assurance and Quality
Control (QA/QC) protocol, which is consistent with industry best practices.

 

Primary sample collection involves secure transport from SolGold's concessions
in Ecuador, to the ALS certified sample preparation facility in Quito,
Ecuador. Samples are then air freighted from Quito to the ALS certified
laboratory in Lima, Peru where the assaying of drill core, channel samples,
rock chips and soil samples is undertaken. SolGold utilises ALS certified
laboratories in Canada and Australia for the analysis of metallurgical
samples.

 

Samples are prepared and analysed using 100g 4-Acid digest ICP with MS finish
for 48 elements on a 0.25g aliquot (ME-MS61). Laboratory performance is
routinely monitored using umpire assays, check batches and inter-laboratory
comparisons between ALS certified laboratory in Lima and the ACME certified
laboratory in Cuenca, Ecuador.

 

In order to monitor the ongoing quality of its analytical database, SolGold's
QA/QC protocol encompasses standard sampling methodologies, including the
insertion of certified powder blanks, coarse chip blanks, standards, pulp
duplicates and field duplicates. The blanks and standards are Certified
Reference Materials supplied by Ore Research and Exploration, Australia.

 

SolGold's QA/QC protocol also monitors the ongoing quality of its analytical
database. The Company's protocol involves Independent data validation of the
digital analytical database including search for sample overlaps, duplicate or
absent samples as well as anomalous assay and survey results. These are
routinely performed ahead of Mineral Resource Estimates and Feasibility
Studies. No material QA/QC issues have been identified with respect to sample
collection, security and assaying.

 

Reviews of the sample preparation, chain of custody, data security procedures
and assaying methods used by SolGold confirm that they are consistent with
industry best practices and all results stated in this announcement have
passed SolGold's QA/QC protocol.

 

The data aggregation method for calculating Copper Equivalent (CuEq) for
rock-saw channel sampling intervals are reported using copper equivalent
(CuEq) cut-off grades with up to 10m internal dilution, excluding bridging to
a single sample and with minimum intersection length of 50m.

 

Copper Equivalent is currently calculated (assuming 100% recovery of copper
and gold) using a Gold Conversion Factor of 0.751 (CuEq = Cu + Au x 0.751),
calculated from a current nominal copper price of US$3.30/lb and a gold price
of US$1700/oz. True widths of rock-saw channel sampling interval lengths are
estimated to be 100% considering the sub-vertical nature of intrusions at
Porvenir Project.

 

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.  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.  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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