SolGold – A World-Class Copper-Gold Project
SolGold talks to us about the discovery and development of world-class copper-gold projects in Ecuador, and how the company is building a copper-gold major.
SolGold began life as Solomon Gold, exploring for copper-gold porphyries in the Solomon Islands.
“At the time, government relationships were tricky and the rainfall made it a difficult environment to work in so our geologists conducted a top-down search for where to go,” explains SolGold’s CEO, Nicholas Mather. “We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. This meant heading to the most obvious location – the Andean Copper Belt.”
Ecuador proved to be highly prospective and did not have a huge mineral mining industry, relying on oil revenue in the past. SolGold entered Ecuador in 2012 and to date has defined a world-class copper-gold deposit with 21.7Moz gold, 9.9Mt copper and 92.2Moz silver at its flagship Alpala Project.
“SolGold is focussed on the discovery and development of world-class copper-gold projects in Ecuador. SolGold is concentrating on the Ecuadorean section of the world’s richest copper-gold belt, the Andean Copper Belt,” Mather tells us. “It’s 700km long, with three parallel metallogenic belts, which in northern Chile, contain 25% of the world’s copper resources and production. The geology is very similar and up until SolGold’s initial efforts in late 2013, there had been no serious porphyry exploration there at all.”
SolGold knew there should be, and after the discovery of Alpala in the first drill hole, and particularly in holes five and nine, SolGold identified numerous other locations throughout Ecuador that boasted the same growth, geological features and opportunity for world-class deposits, similar to or even better than Alpala. Today SolGold boasts a pipeline of opportunities with the same geology, same regulatory environment, same fiscal environment and the same social environment unrivalled by any company in the world.
A Pipeline of Opportunity
“SolGold’s focus on tier one projects gives us global relevance to capital markets and development funding opportunities and the opportunity to help transform Ecuador’s economy, currently based on tourism devices and agriculture,” Mather says. “SolGold is focussed on being best in class in the areas of mining technology development using block caving, which is particularly suited to the vertically elongated shape of the Alpala deposit as well as a social and regulatory and environmental endorsement in Ecuador.”
SolGold’s first project is the 85% owned Alpala project on the Cascabel license in northern Ecuador. Alpala is currently in the Pre-Feasibility Stage, intending to complete the full Feasibility Study by the end of 2021. SolGold’s regional exploration team continues to conduct surface exploration studies and prioritise targets on 13 other projects along the length of Ecuador at the same spatial frequency as major development projects in northern Chile.
“All of the project areas host significant mineralised systems, and several demonstrate high-grade outcrops and mineralisation systems in excess of 6km2. In many cases, surface mineralisation is more extensive and richer than what our geologists found at Alpala, and these projects are all 100% owned by SolGold,” Mather points out. “SolGold is planning significant drilling programmes on the five best targets as soon as possible, including Rio Amarillo, Porvenir and La Hueca Target 6. These targets are supported by promising surface exploration and geological surveys.”
While the company has, so far, built its name as an explorer, SolGold is already taking the first, tentative steps into development.
“The greatest value addition for shareholders comes from the discovery of a new virgin orebody. That was certainly the case for Alpala, which saw SolGold’s market capitalisation reach US$1 billion,” Mather says. “SolGold is working on Alpala’s transition into a developer, but we are ever mindful that there is nothing more effective than a discovery. SolGold’s unique pipeline of projects gives us an incomparable position to be an explorer, a developer and miner on several projects.”
The Context of Opportunity
SolGold’s projects don’t exist in a vacuum, however. The increase in the money supply from the central banks, for instance, has affected gold prices, while copper is equally sought after as a material for electronics.
“The world is awash with money. Likewise, the world is a washed with expertise and these pools are available freely to junior explorers as much as major miners. SolGold can move faster and more efficiently than a major company and with considerable sensitivity to Ecuador’s fiscal requirements of Ecuadoreans,” Mather says. “SolGold’s development as a company, rather than just Alpala as a project, has been endorsed time and time again by the explosion of the money supply over the past ten years, resulting in a paradigm shift in the US dollar price. The global gentrification and electrification and the increasing electric demand by a rapidly urbanising global environment mean that copper is going to be heavily demanded. At the same time, copper resource grades, access to water and concentrate qualities have all been declining in a number of major mining projects globally, and this bodes well for the outlook for copper prices. In the period after World War Two, abundant capital and low-interest rates similarly saw strong programmes of industrial and infrastructure expenditure as global economies rebuilt. We expect the same macroeconomic drivers to underwrite increasing demand for the price of copper. SolGold is well placed to benefit from the increase in both copper and gold prices against the US dollar in the decades to come.”
As well as keeping a careful eye on the economic environment, SolGold also pays close attention to social and environmental issues.
“We take the view that the foundation for Environmental, Social, and Corporate Governance is a real focus on a social license to operate. For most companies, a social license to operate is something that rolls off executives’ tongues, in SolGold we actually practice it,” Mather says. “ESG is a key feature of our activities and we involve the Ecuadorean people at all levels, as much as possible. We have a 98% workforce and we look after the communities; we endorse the requirements of local governments and we liaise with national governments to ensure we’re addressing industry requirements. We are actively involved with the communities surrounding Alpala and constantly work on evolving ESG programmes including plants in our on-site nursery, the bakery and chicken farms within the villages, fish farms on-site and improvements to facilities at local school and community areas. SolGold also places huge importance on education and we have a number of sponsorships and partnerships with local universities.”
Looking forward, Mather’s optimistic about SolGold’s prospects.
“In five years, SolGold is aiming to be in production at Alpala and working on feasibility studies and exploration programmes on its 13 other projects,” he says. “It’s too early to speculate on what we may be valued at or capitalised at, but the upside is massive. We’re building a major gold and copper mining company and it’s going to produce nearly as much value in copper as it does gold – that is exciting.”