Here’s the full article if still needed14 Nov 2022 17:04
The departure of Darryl Cuzzubbo as MD and CEO of Ecuador copper-gold junior developer SolGold has exposed a growing rift between key shareholders about the future of the company, as its merger with fellow Ecuador junior explorer Cornerstone Capital Resources brings a new burst of energy to the stalling company.
Maxit Capital chief executive Bob Sangha believes BHP and Newcrest Mining have dishonoured themselves in their attitudes towards SolGold.
Maxit was a 19.5% shareholder in Cornerstone and co-owner of the subsidiary which holds the Cascabel project in Ecuador. Now it holds around a 5% stake in SolGold as a result of the merger.
BHP and Newcrest said they were unhappy with a US$50 million royalty deal SolGold recently struck with Osisko Gold Royalties for a 0.6% net smelter return (NSR) on its Cascabel licence area.
After its recent general meeting, BHP chief executive Mike Henry said SolGold has come up with a "disappointing high-cost" finance option, telling shareholders that SolGold is just one option in the BHP portfolio.
"It's but one of the many options that we're creating across the company for future growth in these future-facing commodities. … We've taken a toehold position in Filo Mining in Argentina, another potentially large copper deposit, there's Kabanga Nickel in Tanzania, a large nickel deposit, plus everything else we're doing inside the portfolio," he said.
Newcrest chair Peter Tomsett called the financing "expensive" while Newcrest CEO Sandeep Biswas told reporters after its annual general meeting on Wednesday, "that sort of expensive financing really is negative to the long-term shareholders of the company. … This is sacrificing the return for shareholders in the long-term and I don't understand it."
Sangha didn't mince his words when Mining Journal called him. "[BHP and Newcrest] are self-serving in their actions at the recent annual general meeting and in talking down a tier one discovery to the detriment of other shareholders. If they don't like what we are doing they can get out," Sangha told Mining Journal
After the failed financing attempt this summer Cuzzubbo spoke of disagreement among the principal shareholders on the best way to bring money into the company. "BHP and Newcrest have a view on how we should be raising capital funding and the shareholders have a different view on that, and we need to work through what's best for all typical shareholders," said Cuzzubbo at the time.
While BHP says it has other options, Sangha clearly thinks so with other major miners including Fortescue Metals, Anglo American, Rio Tinto, First Quantum Minerals and Barrick Gold and more all circling Ecuador looking for opportunities.
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