RE: Let the games begin13 Oct 2022 11:02
“Japanese commodities giant Mitsui could emerge as a rival for BHP and Newcrest in the development of the big South American copper project controlled by Brisbane-headquartered SolGold.
SolGold boss Darren Cuzzubbo told shareholders overnight on Wednesday that Mitsui was one of a number of potential partners for the company’s giant Cascabel project in Ecuador, with the Japanese giant taking part in a visit to the copper and gold project last week.
SolGold is conducting a strategic review on Cascabel, regarded as one of the hottest emerging copper properties around the world, and Mr Cuzzubbo said SolGold had recently hosted companies that had an interest in investing directly into the mine, and at least one major interested in an early-stage offtake deal for its output.
Mr Cuzzubbo was responding to questions asked by shareholders about a comment made on October 6 by Ecuador’s deputy mining minister regarding a meeting with Mitsui executives over potential involvement in Cascabel.
“Parts of the strategic review had already commenced sometime ago and that includes bringing in parties that are interested in taking a stake at the asset level at Cascabel,” Mr Cuzzubbo said.
“There‘s been a number of visits to Cascabel of which one was tweeted. This is one of the options that we’re looking at – organisations that could take a strategic interest at the asset level. We’ve had an off-taker come and visit the site as well.”
Mr Cuzzubbo was speaking on an investor and analyst call to pitch the company’s recent friendly tie-up with Canadian-listed Cornerstone Capital Partners, which will hand SolGold complete control of Cascabel.
Under the terms of the deal SolGold will issue 15 of its shares for each Cornerstone share on issue, giving Cornerstone holders about 20 per cent of the combined company. Cornerstone owns 15 per cent of Cascabel, as well as a suite of other exploration properties in South America, and the deal on offer valued the company at about $US108m ($172m)
The friendly agreement is the latest in a series of offers by SolGold to buy out Cornerstone.
Cornerstone also holds about 7 per cent of SolGold shares, offering SolGold the opportunity for a short-term cash injection, without diluting other shareholders, if Cornerstone holders approve the takeover and SolGold then puts the stake on the market.
SolGold had $26m at bank at the end of June, and in July suffered an embarrassing setback when a group of its major shareholders knocked back a potential capital raising, triggering the departure of chief financial officer Ayten Saridas after only a few weeks in the job.
Mr Cuzzubbo told shareholders SolGold was spending about $3m to $3.5m a month on its projects, and the company believed it had enough cash to last until at least December without raising additional capital.
The Cornerstone deal is mixed news for London-listed SolGold’s fractious relations with its two major shareholders, BHP and Newcrest.
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