SolGold the forgotten game in copper space – sharecafe
There is one copper game that Australian investors seem to have forgotten – one that BHP and Newcrest are all over the place – and it could very well change the future global supply / demand equation for the red metal.
As we have pointed out for some time, thanks to the boom in renewables, copper is now a hot commodity (along with nickel, lithium, cobalt and aluminum) and even though prices this week have strongly fell from Monday’s peak of over US $ 4. .70 a pound in trading on Comex at just over $ 4.56 a pound on Thursday, that doesn’t hide the fact that miners of all sizes want the metal.
South 32 and Sandfire Resources have reached A $ 2 billion deals to enter or expand their involvement in the metal, Newcrest has made it clear that its 8-year expansion plan here in Australia and Canada has a tinge of copper, while maintaining its gold production, OZ Minerals continues to find and prove deposits in South Australia and Brazil.
BHP controls the huge Escondida mine in Chile, as well as two other mines in that country, Olympic Dam and Oak Dam in South Australia, and nearby prospects in the same state and in the Northern Territory.
Investors have seen their attention diverted by BHP and Andrew Forrest seizing control of small Canadian explorer Noront Resources and its very promising prospects for nickel, copper, gold and PGE metals in northern Ontario .
And it’s a similar story among small explorers where the rush to find copper (and report it in drill results) has reached almost frenetic levels. Chalice Mining would stand out with its emerging nickel and copper metals PGE which Julimar found northeast of Perth and which will soon get an initial resource figure.
But there is an Australian explorer – based in Brisbane but not listed here but in London and Canada – and that is SolGold.
And its two major shareholders are Newcrest and BHP (and isn’t that a delicious irony – Newcrest is the modern version of the old BHP Gold which still houses the Telfer gold mine (and a bit of copper) in East Pilbara (nearby Rio Tinto’s Winu.) Newcrest and BHP together control over 27% of the shares issued by SolGold.
SolGold owns 85% of the world’s most exciting copper / gold / silver prospect in northern Ecuador called Cascabel – and it’s fat – the same type of deposit as Escondida in the south to the north of Chile, but richer because of its gold and silver content.
Cascabel is located on the northern part of the Andean copper belt, which accounts for almost half of the world’s copper production (especially in Chile and Peru).
The first prospect at Cascabel is known as the Alpala deposit and, according to SolGold, it is huge – the deposit comprises 2.663 billion tonnes at 0.53% Cu equivalent in the measured and indicated resource categories, for a contained metal grade of 9.9 million tonnes of copper, 21.7 million ounces of gold and 92.2 million ounces of silver.
The SolGold website states “Alpala produced some of the largest drill hole intersections in the history of porphyry copper-gold exploration, as evidenced by hole 12 (CSD-16-012) returning 1560m grading 0.59% copper and 0.54 g / t gold, including 1044 m grading 0.74% copper and 0.54 g / t gold.
That’s 1,560 meters of continuous mineralization – or in other words, just over 31 Olympic-size swimming pools (50 meters long) lie back to back.
The TAM deposit is located approximately 3 km north of the Alpala deposit, the main target of the Cascabel concession.
Ecuador’s Energy Ministry said in a 2019 statement that Alpala “could become the largest underground silver mine, third largest gold mine and sixth largest copper in the world.” .
During its first 25 years, Alpala would have an annual production of approximately 207,000,000 tonnes of copper, 438,000 ounces of gold and 1.4 million ounces of silver.
This week, SolGold released the first estimates of the size of a second deposit at Cascabel, called Tandayama-Ameríca (TAM). It’s not as good as Alpala, but still big.
SolGold Says “Independently Verified” Update Provides First Resource Estimate (Open Pit and Underground) of the TAM Deposit, Showing 233 Million Tons at 0.33% Cu Equivalent Containing 530,000 Tons of Copper Mt Cu and 1.2 million ounces of gold in the area indicated. category, plus 197 million tonnes at 0.39% Cu equivalent containing 520,000 tonnes of copper and inferred 1.24 million ounces of gold.
SolGold said this estimate is based on analyzes of the first 18 holes drilled at the TAM deposit. Drilling continued during the appraisal process, and visual mineralization from an additional 12 holes suggests that there is potential for future resource growth, with higher grade mineralization encountered so far remaining open at depth.
“The TAM deposit adds new copper and gold mineralization to Alpala’s extensive metals inventory on the Cascabel Project,” SolGold Acting CEO Keith Marshall said in a statement.
“The resource offers an option and the potential to generate ore economically earlier, which will complement Alpala’s high grade underground ore. “
The company also said it expects to receive a briefing from the project committee on the pre-feasibility study for the project later this month.
In September, SolGold announced its intention to divest 10 of the 72 exploration concessions held at its four subsidiaries in Ecuador, which will reduce its future exploration commitments by approximately $ 75 million.
There are several other prospects in the Cascabel area called Blanca, Nieves and Rio Mira.
Earlier this year, SolGold struck a truce in a brawl with Canadian shareholder Cornerstone Capital Resources to allow the Alpala prospect to go into mining by 2025.
The truce ended two years of shouting between the management of SolGold and Cornerstone, the company’s 4th shareholder and the seller of the 85% stake in Cascabel (Cornerstone retains 15%) now held by SolGold.
“The parties will explore and assess a range of strategic and financial options focused on maximizing value for their respective shareholders with respect to the Cascabel project,” SolGold said in a statement in June.
Mining analysts said the truce was imposed on the company by BHP and Newcrest, which participated in SolGold’s last $ 73.8 million fundraiser in April.