SolGold sets Cascabel project milestones to reach by year-end

Ecuador-focused SolGold (LSE: SOLG; TSX: SOLG) reaffirmed its commitment to de-risking and advancing its flagship Cascabel copper-gold asset through a set of milestones, in a progress update on Wednesday.

The company said it has launched a comprehensive geotechnical program to identify locations for critical infrastructure, including the process plant, tailings storage facility, camp, waste dumps, and surface workshops. Additionally, the program will assess any unexpected mineralization within the area. 

SolGold is also working on forming a specialized project management team, which is expected to be fully staffed by the start of the fourth quarter this year, when it anticipates bringing in the first drill.

In tandem with the geotechnical work, SolGold said it was reviewing expressions of interest from independent consultants and firms to support further de-risking activities. 

SolGold began its exploration at Cascabel in 2012, which led to the significant discovery at Alpala in early 2014, followed by the identification of the Tandayama-Ameríca deposit in subsequent drilling programs.

The company released in February a new pre-feasibility study (PFS) for Cascabel in which it managed to slash upfront costs. Pre-production capital used for initial mine development, the first process plant module and infrastructure is now estimated at US$1.5 billion, compared to US$2.7 billion from the PFS issued in April 2022.

Investors have been skeptical of SolGold management’s ability to deliver the project to its potential. The company’s share price has halved over the past year, while it has had to cut spending to stay afloat, prompting a strategic review of its assets.

Bet on growth

To date, the company has achieved key milestones, including obtaining underground exploration geotechnical drilling permits. This allows SolGold to proceed with its underground exploration plans, including the development of the mine’s future portal and declines.

The Cascabel project is a cornerstone of SolGold’s growth strategy and major miners including BHP (ASX: BHP) and Newmont (NYSE: NEM) through the acquisition of Newcrest and China’s Jiangxi Copper, have already invested in it.

The Ecuadorian government inked a contract with SolGold in June for the development of Cascabel, which is expected to generate an investment of over US$4.2 billion during its 28 years of operation, according to figures from the country’s energy ministry.

The company secured in July a US$750 million investment from Franco-Nevada (TSX, NYSE: FNV) and Osisko Gold Royalties (TSX: OR; NYSE: OR).

According to SolGold, the size of the entire resource indicates the mine’s potential to be a multi-generational asset, potentially one of the 20 largest copper-gold mines in South America.