LONDON, May 11 (Reuters) - BHP-backed SolGold Plc,
the copper-gold company focused on Ecuador, has agreed a
financing package of up to $150 million with streaming company
Franco-Nevada Corp to develop its Alpala project, sending its
shares up by around 10%.
Toronto-listed Franco-Nevada, which provides miners
and oil and gas producers with upfront cash in exchange for
future production, will receive a perpetual 1% net smelter
return (NSR) interest from SolGold.
An initial funding of $100 million could be increased to
$150 million, which would also increase the NSR for Franco
Nevada, the company said in a release.
SolGold will spend the coming months developing a
feasibility study of the Alpala project that is expected to
start production of copper and gold in 2025, Ingo Hofmaier,
SolGold's executive general manger – Project & Corporate Finance
- told Reuters by phone.
The company, which earlier this year strengthened its
takeover defence by adding U.S. investment bank Citi to its
advisors, is in talks with investors and banks to secure an
overall $2.7 billion needed to complete the project, Hofmaier
said.
BHP , the world's biggest miner, owns
15.31% of the Brisbane-based miner, while Australian gold miner
Newcrest Mining Ltd owns 15.23% of it, Refinitiv data
shows.
SolGold's share price at 0940 GMT was up 9% 26.90 pence,
after reaching 30.25 earlier. It outperformed the wider sector,
which fell around 1%.
(Reporting by Clara Denina; editing by Barbara Lewis)
SolGold (SOLG)