SolGold Explores Open-Pit Potential to Expedite Cascabel Production
Why we think this is neutral
The open-pit strategy has the potential to de-risk the Cascabel project in the early years, but the details and economic impact are still unclear. The drilling program is a positive step, but the results are pending, and the path to production is not yet defined.
Key Points
- SolGold to conduct 5,400m drilling program on Tandayama resource area to test for open-pit potential
- Aim is to expedite production and enhance financeability of the Cascabel project
- Company recently completed Pre-Feasibility Study on Cascabel, delivering NPV of $3.22bn and 24% after-tax IRR
- Secured $100m in pre-development funding, with additional $650m contribution conditional on further milestones
Summary
SolGold announced that it is investigating options for early production from open-pit and sub-level caving opportunities around its Cascabel project in Ecuador. The company plans to conduct a 5,400m drilling program on the Tandayama resource area to establish resources and test for open-pittable near-surface mineralization. This is part of SolGold's strategy to potentially expedite production and improve the financeability of the Cascabel project. The company recently completed a Pre-Feasibility Study on Cascabel, which delivered an NPV of $3.22bn and an after-tax IRR of 24% for an initial 12Mtpa underground block caving operation. SolGold has also secured $100m in pre-development funding from Franco Nevada and Osisko Royalties, with a further $650m contribution conditional on completing the feasibility study, permitting, and financing.