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“Australia's SolGold has until December to complete the negotiation process of the exploitation contract for its US$2.75bn Cascabel copper project in Ecuador.
In a management discussion and analysis report, the company said the negotiations, which began in January, include a non-binding agreement, term sheet, and the request to move to the exploitation phase.
In December, the company requested a modification to the previously signed investment protection agreement to better align it with the exploitation contract under negotiation, and to obtain additional benefits provided by the government that were not available when the agreement was signed in 2021.
The energy and mines ministry is holding bimonthly meetings with SolGold to review the approvals required for project's progress and address other actions required by the government, the company said.
In a recent interview with BNamericas, energy and mines minister Fernando Santos said that Cascabel, along with the US$250mn Curipamba copper-gold project, would both see construction start in 2024.“
If we start construction in 2024 that means we do it off the current PFS.
So Solgold plan to build Cascabel.
If we are only a year / year and a half away from construction some engineering better be ongoing. Takes some time and effort to design a multi billion dollar project. Financing also has to be in place by the time construction starts. Some people will be very busy for the next little while if construction is starting in 2024. If that is under the Solgold flag is to be seen of course.
Snowman , exactly but I don't think it will be solgold imho
So, some people are expecting financial institutions to pony-up circa $3bn on the basis of a study which, by its very definition, isn't definitive nor bankable.
Doesn't seem very likely to me. In fact, the proposition is fanciful, to say the least.
Well addnicknt , if that's the case I fear for our future , because if the buyout doesn't happen we're totally fecked then.
covgaz, which is exactly what the Prospectus tells us will happen in January 2024 if we haven't raised any more cash. Btw, I don't envisage that will happen as we have many opportunities available to us.
The point I was trying to make reflects my confusion on this matter. On the one hand we are told that expenditure has been reduced and that we have sufficient information on Cascabel, and on the other hand we are not anywhere near having a DFS/BFS. So how can we raise $3bn? It just doesn't make sense to me.
I wrote this to another poster on this BB privately a couple of weeks back, think it is relevant to the above article shared by DBW:
We have to remember that these guys are politicians and probably shouldn't be held in much higher regard than the ones on our own shores. They are thinking about the next 2 years and might not even be in position much after that. Not saying they are empty words, and acknowledge that mining is a core part of the (current!) gov't's economic plan for the country, but the scale of the mine and what is required to build it (particularly the upfront finance) means that ultimately the gov't are going to be working towards the timelines of whoever is paying for it.
In short - I take these statements with a large pinch of salt, unless the Ecuadorians plan on requisitioning Cascabel and paying for it themselves (ha!).
SM, me too, in fact my wife has just had to buy more salt. Frankly, 2024 strikes me as being total fantasy.
Filtered mate! Like the other 50+ he reckons he has on filter. Plenty around here don't like to read the truth , it spoils the daily club of back slappers.
add, it'll be miraculous if we have produced a DFS by 2024, let alone started construction.
SharketMare or any other posters. If the DFS would add value to our asset or make the sale easier, why have we not completed this requirement? A completed DFS would make our asset more attractive, surely?
Is it that we don't have the funds or lack the will and/or manpower?
Or, do we have a possible buyer/bidder and this makes a DFS irrelevant?
Opinions please?
"Or, do we have a possible buyer/bidder and this makes a DFS irrelevant? "
Thats the one Eish...and also why we've cleared the decks to such an extent that there was nobody clever to put the Propsectus together...
Agree, Lasso and mining ministry are 'trying' their very best to attract business and get billion dollar projects off the ground. Lasso is under the cosh at the moment as inflation hurting (not his fault) and people growing angry with lack of business opportunities etc etc etc. Lasso will fall over backwards and lay out the red carpet (not red tape) for SOLG .... anything to get the headline of 'multi billion dollar mining deal agreed'. So anyone that thinks the Ecuador gov will be obstructive or play hardball is living in la la land.
Ecuador need to send a firm message to all potential miners / majors out there that they are OPEN for Business.
But what Lasso et al are not keen on is this lethargy or limbo position of having mines that cost billions in the hands of minnows when they should be in the handoff deep pocketed companies. So Lasso will want to push and press SOLG into agreeing some kind of deal with a finance partner or full sale. The sooner the better. So all in all...everyone seems aligned to the common interest imho and that's why we look in good shape to get this done in 2023.
Geejuss Red! Hope you're right and that your observation and post IS correct! it would help, LOL!
Eish, that's the critical question and the company has done little to clarify the situation.
Do we need a DFS?
Why did the company say we have sufficient information? Sufficient for what? Capital raising, or the sale of the asset?
How can we raise cash in the money markets without a DFS/BFS? This seems highly improbable to me.
How much of our recently raised hypothecated cash for Cascabel will be spent on a DFS? All of it? Part of it? None of it? Have we downed tools on the study? If so, why? And why let the Minister get up on his hind legs and boldly announce construction will start in 2024 when we know that it's highly unlikely?
So many questions and absolutely no answers...just more speculation.
I should add, that if the Chinese do get involved (deeply involved) then I fancy they might repeat what they have done in the south and go for a smaller start up mine like Tandy offer... open pit and cheap to extract, generate some profits and then make the block cave works and second phase of mine build out (or down) relatively easy to finance.
So Tandy kicks off in 2024/2025. Block cave deep shaft developments follow in 2025/26 and then mine plan build plans for greater exports kick off in 2027/28 as currently guided.
Tandy potentially holds the key to reducing the overall build costs albeit on a separate satellite project basis. Far better to get some income coming in while bigger pipeline/infrastructure plans and deals go on for the bigger Alpala mine.
Interesting another conglomerate being mentioned ,next week going to be fun imho ,o/t I've just bought into AYM ,as we move towards global demand for rare minerals this minnow has just taken a huge chunk of a company with massive upside in europe and the best to come next month on a mine in Anglesey ,12yrs copper,tin and gold to mine ,fair chance of government funding 150+ jobs to be created ,levelling up funds available maybe ,so fully loaded in here for sometime and a chunk in AYM whats not to like !!:):)
Eish, I think we shot ourselves in the foot somewhat when we produced the revised PFS under Cuzzubbo's leadership, which took a much more cautious approach (I can't remember what % of the orebody it accounted for). The project economics were viable but not great. Solgold told us they were going to produce an amended PFS in H2 2022 and then a DFS in H2 2023. This was back in April 2022. The PFS addendum has been canned, and we are allegedly pushing ahead with the DFS - and to be fair to SOLG if they do produce that study this year, they will have stuck to a timeline.
I think the main reason the studies have been either canned or delayed, are because of the macroeconomic environment has deteriorated substantially since April '22. Inflation has meant costs have rocketed, and the economics of the project (particularly given how conservative we were) are now far less attractive.
Any ideas on rough numbers on Tandy? $300m spend ...mine life of around 6 to 7 years with 150 to 200koz equivalent?? That's much easier for SOLG to finance. Doesn't resolve the Tier 1 asset financing but may help reduce or attract a partner or counter bid scenario if or when announced. Generates decent profits in years 2 to 3.
SM, 21%.
If what you say is true, the company are misleading investors and I do not believe they are.
Add, which part of what I said would mean SOLG are misleading investors? Thanks for the 21% - I did glance over the PFS but it wasn't clearly signposted.
SP currently controlled with a 34/35k buyer/seller up and down, keen to keep the SP where it is...why...??
But is it highly unlikely addickt...?
China is already mining in Ecuador...they are world leaders in civil engineering projects...they would simply bring in an army of Chinese to build it...
And they don't need a DFS if they are self funding, so they could even start construction in 2023 maybe...?
Is this the same Ministry that announced that Mitsui want a stake in Cascabel (Vice President of Mines)?
Btw, I would assume construction can only start after a mining license has been granted. I am not aware Solgold has one or are even in the applying process. Pass me the salt jar please. Oh no, I might melt :-)