LONDON (Alliance News) - SolGold PLC on Monday said it will start sourcing financing for its Alpala prospect after releasing the preliminary economic assessment.
Alpala is on northern Ecuador's Cascabel project. SolGold owns 85% of Exploraciones Novomining SA, which owns all of Cascabel.
Alpala has a net present value between USD4.1 billion and USD4.5 billion, with an internal rate of return of between 24.8% and 26.5%.
Capital expenditure before production is forecast at USD2.4 billion to USD2.8 billion, rising to USD10.1 billion to USD10.5 billion including the life of mine.
SolGold, in which BHP Group PLC and Newcrest International Pty Ltd are both major shareholders, sees four different plans at Alpala, with the first being 40 million tonnes of ore a year for 66 years.
The second is for 50 million tonnes a year with a staged ramp up for 57 years, while the third is for the same amount but rapidly ramped up for 55 years.
Lastly, SolGold could mine for 49 years, at 60 million tonnes of ore a year.
SolGold's preferred mining method is for underground low-cost mass mining using block cave methods, and it sees initial payback in between 3.5 to 3.8 years depending on production rates.
For the first 25 years, SolGold anticipates 207,000 tonnes of copper a year, 438,000 ounces of gold, and 1.4 million ounces of silver.
Over the entire life of mine, this would be 150,000 tonnes of copper, 245,000 ounces of gold, and 913,000 ounces of silver a year.
In the rest of 2019, SolGold is to carry out further exploration Alpala to help update the mineral resource. It will also look at further geotechnical and hydrogeological data and tailings disposal plans.
SolGold will start permitting and fiscal talks with the Ecuadorian government, as well as start discussions with third-party financiers to help SolGold pay for Alpala.
SolGold hopes to finish the pre-feasibility study in December, with a definitive feasibility study to be finished a year later.
Shares were 1.1% lower on Monday at a price of 37.91 pence each.
SolGold (SOLG)