Solaris exits Canada for Switzerland with new CEO, board and spin-out plans

Solaris Resources (TSX: SLS; NYSE: SLSR) has hired Glencore’s (LSE: GLEN) former head of copper as its new CEO and advanced plans to move its office to Switzerland from Canada which had derailed a Chinese funding deal.

The company changed its board of directors and plans to spin out non-core assets La Verde, Capricho, and Paco Orco into a new company that will also benefit from the experience of Solaris’ new CEO and president, Matthew Rowlinson, the company said on Thursday.

He joins Solaris on Jan. 1 with after serving at Glencore for 11 years, most recently as head of copper business development with extensive merger and acquisition experience. The company continues to focus on its flagship Warintza project in Ecuador.

“I want to welcome Matt and the incoming directors to Solaris as we position ourselves for a pivotal year ahead,” Solaris executive chair Richard Warke said in a release. “The Solaris team has brought Warintza within view of completing permitting and commencing full-scale construction for what could be one of the industry’s last major copper districts to be developed at low elevation and adjacent to infrastructure.”

Zug

The Toronto-based company’s new headquarters is to be in the low tax region of Zug, marking an exodus from Canada after Ottawa early this year started a national security review of China’s Zijin Mining’s plan to invest $130-million. Solaris cancelled the deal, but resolved to avoid such reviews by redomiciling, at first saying it would move to Quito, Ecuador’s capital.

The incident highlights the dilemma Western countries and developers face: they need Chinese capital when stock market investing in juniors is sluggish, while governments want to wean off dependence on China’s control of critical minerals.

Two years ago, Ottawa forced Chinese investors to divest from several lithium juniors with assets outside of Canada based on national security concerns. And in June, the government diverted a sale of $3 million worth of stockpiled rare earths mined in the Northwest Territories from a Chinese company to the Saskatchewan Research Council.

The emigration won’t pose adverse tax consequences or impact its stock exchange listings, Solaris said. Solaris shares gained 1.2% to $4.29 apiece on Thursday morning in Toronto, valuing the company at $711.5 million. Its shares traded in a 52-week range of $2.58 and $5.63. 

Board changes

The company appointed new board member Rodrigo Borja, a lawyer with decades of experience in Ecuador including as chief legal officer at Kinross Gold’s (TSX: K; NYSE: KGC) Ecuador subsidiary. Hans Wick joins the board after decades of experience in the financial services and investment sector, most recently as the managing director of a Swiss private bank.

Linked to his appointment, Rowlinson agreed to subscribe for $500,000 of Solaris shares in a private placement. Rowlinson will also be on the board.

He replaces Daniel Earle who’s been president and CEO since 2019. Before that Earle was a vice-president and director at TD Securities where he covered the mining sector for more than 12 years. He’s been a senior executive with several North American public mineral exploration and mining companies.

The new board members supersede Earle, Poonam Puri, Kevin Thomson and Ron Walsh, who are to resign from the board effective Jan. 1, Solaris said.

Spin-out

The company’s planned spin-out is to be a “new growth-oriented copper company focused on the consolidation of operating and advanced development assets with exceptional upside potential,” it said. Details are to be released in the new year, it added.

Solaris holds 60% of the La Verde copper project in Mexico with Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK) at 40%. The site 320 km west of Mexico City is close to a highway, railway, power, port and water.

Capricho and Paco Orco are projects in Peru where Solaris has options to earn three-quarters of them. Samples from Capricho show grades of up to 3% copper, while Paco Orco holds 0.5% lead, 0.26% zinc and 58 grams silver per tonne from leached material, the company says.

The company also owns the Tamarugo property in Chile. It has the same geologic and structural setting as state mining company Codelco’s El Salvador and former Potrerillos copper mines located about 50 km northeast, Solaris said.

Solaris said in September it submitted an environmental impact assessment to the Ecuadorian government for construction of Warintza. A prefeasibility study is expected by the second half of next year.

Warintza’s central deposit has 579 million indicated tonnes grading 0.47% copper, 0.03% molybdenum and 0.05 gram gold per tonne (0.59% copper equivalent), according to an April 2022 resource update. It has 887 million inferred tonnes grading 0.39% copper, 0.01% molybdenum and 0.04 gram gold (0.47% copper equivalent).