BHP, the world's largest mining company, is set to increase its stake in SolGold, which is developing a major copper project in Ecuador.
Under the deal, BHP will invest $22 million to increase its stake to approximately 14.7% from 11.4% currently, SolGold said Monday.
"SolGold's view is that the agreement endorses its view of SolGold's commanding Ecuadorean copper and gold exploration footprint, and in particular the robust Alpala deposit," said the company's CEO Nicholas Mather.
SolGold's Alpala project in northern Ecuador could produce 207,000 mt/year of copper, 438,000 oz/year of gold and 1.4 million oz/year of silver during the first 25 years of production, the company said.
The company is due to complete work on a prefeasibility study by the end of March next year.
To increase its share in the company, BHP will buy 77 million shares at GBP0.2215 per share (29 cents per share), a 13% premium on SolGold's closing price on November 22.
The deal will make BHP the largest shareholder in SolGold, ahead of Australia's Newcrest Mining, which currently owns 14.79% of the company. Other major shareholders include Cornerstone Capital Resources, which owns 15% of the Alpala project, and investment management firm Blackrock.
The project contains a resource of almost 11 million mt of copper and 23.3 million ounces of gold and could remain in production for at least 55 years, SolGold said.
Ecuador is developing its potential for base and precious metals in order to reduce reliance on oil exports. Chinese-owned Mirador mine in July became the country's first large-scale copper producer, while earlier this month, Lundin Gold inaugurated the $692 million Fruta del Norte gold mine.
Source: Platts |
