Ecuador Resources

[Lone Clone]

CRU/CESCO - SolGold going alone on Ecuador find despite partner interest

http://www.kitco.com/news/2018-04-09/CRU-CESCO-SolGold-going-alone-on-Ecuador-find-despite-partner-interest.html

Reuters Monday April 09, 2018 15:30

* CEO says company able to go it alone on copper/gold discovery

Ecuador riskier than Chile, much less explored

By Barbara Lewis

SANTIAGO, April 9 (Reuters) - SolGold has received advances from a dozen big miners, including BHP and Vale , for its copper and gold discovery in Ecuador, an executive said on Monday, but has rejected them to develop the project alone.

SolGold bucked a trend of a lack of new discoveries following a fall-off in investment during the commodities crash of 2015-16. The company's flagship project in Ecuador, named Cascabel, appears from exploration to be a major new high-grade copper and gold find to rival some of the largest existing mines. Exploration Manager Jason Ward, speaking on the sidelines of the CRU/CESCO copper conference in Santiago, said the company had been approached many times by potential partners and had repeatedly said no.

Copper is especially sought-after as assets in top producing country Chile become exhausted.

On Monday, Vale became the latest to ask SolGold whether it wants a venture partner, Ward said.

Vale, the world's largest iron ore producer, has said it is seeking to expand its copper output. It had no immediate comment on Monday when asked about SolGold.

Ward said a takeover would be "irresistible" once the right offer came along, possibly from a gold miner rather than a more diversified major, given the large amounts of gold associated with copper in the Ecuadorian discoveries.

However, he added that the time was not yet ripe, as commodity prices are expected to rise.

SolGold CEO Nick Mather has a track record of making discoveries and selling them on rather than developing them, but said the company could break that pattern in Ecuador.

"Our business model is not based on getting approaches. We're quite capable technologically and financially," he told Reuters ahead of this week's conference.

Ward said the plan was to keep drilling, which adds to the value of the reserves in Ecuador as more information is established.

"It is definitely not the right time to sell now," he said.

SolGold, an Australian company listed in Toronto and London, caused a stir in 2016 by rejecting a $30 million offer from BHP for a 10 percent stake in the company.

The offer also included an additional $275 million proposal linked with acquiring a 70 percent stake in the unit managing Cascabel.

SolGold said it preferred to work with Newcrest , which has a 14.5 percent stake, because that would leave it in control.

It says it has first-mover advantage in a country it entered in 2013, putting it at the vanguard of a flurry of interest as Ecuador's government seeks to diversify from oil to mining. (Reporting by Barbara Lewis, Additional reporting by Alexandra Alper and David Sherwood, Editing by Rosalba O'Brien)