New Ecuadoran Mining Bill

RNS Number : 0973F

SolGold PLC

20 May 2013

 



20 May 2013

SolGold Plc

("SolGold" or the "Company")

New Ecuadoran Mining Bill Lifts

Cascabel Copper Gold Porphyry Project

Key Points:

Ø New Mining Bill in Ecuador smooths exploration and Mine Development processes in Ecuador.

Ø Drill contractor selection completed for Cascabel first drill phase 2,500 m.

Ø Six drill hole locations finalised to test outcropping porphyry occurrence at high grade Alpala prospect over 1km² to a depth of 600 m.

Ø New CEO, Alan Martin, former Colonial First State Global Resource Fund Manager commences role.

The Board of SolGold advises that the Government of Ecuador has presented a new Mining Bill to the Ecuadoran Congress. The Bill is expected to be passed quickly due to strong support from President Rafael Correa's ruling Alianza Pais Party. The Bill contains a number of concessions which SolGold believes will encourage mineral exploration and mine development in Ecuador. Importantly the Bill contains ceilings on mining royalties and promotes for capital payback prior to the application of windfall taxes.

The new Mining Act sets a framework for the development of Kinross Gold Corp $1.3 billion 14moz Fruta del Norte Project, Southern Ecuador and the Ecuacorriente $1.4 billion El Mirador copper project. Other developments are in the pipeline in Ecuador including the Rio Blanco Gold Silver Project, the Panantza San Carlos Copper Project and the Quimsacocha gold-copper-silver mine.

SolGold will expedite drilling and appraisal of its Cascabel and La Encrucijada Projects, commencing with its 2,500 m programme at the high grade Alpala Project at Cascabel. The drill program is awaiting final drill permits, a process which is well advanced.

The Ecuadoran Government has said the agreements with Ecuacorriente and Kinross would be a model for future deals which should allow Ecuador to develop a large mining industry.

SolGold is attracted to Ecuador due to its presence on the Andean Copper Belt, and its relatively unexplored status. Chile and Peru to the south and Colombia to the north are well endowed with high grade and/or large copper gold deposits.

SolGold can acquire an 85% interest in Cascabel and the La Encrucijada Projects.

SolGold's recently appointed CEO, Mr Alan Martin, formerly Manager of Colonial First State Global Resources Fund, has travelled to the Project this week to review permitting, drill sites and contractor finalisation.

A link to the complete press article regarding the Mining Bill is provided below:

http://www.mineweb.com/mineweb/content/en/mineweb-political-economy?oid=190542&sn=Detail

By order of the Board

Karl Schlobohm

Company Secretary

Contacts:

Mr Alan Martin                                                                                                    Tel: [phone]

SolGold plc (CEO)

[e-mail] 

Mr Karl Schlobohm                                                                                              Tel: [phone]

SolGold plc (Company Secretary)

[e-mail]  

Mr Ewan Leggat / Katy Birkin                                                                            Tel: [phone]

SP Angel Corporate Finance LLP (Broker)

[e-mail]  

Mr Stephen Weir                                                                                                Tel: [phone]

RFC Ambrian Limited (Nominated Advisor)

[e-mail] 

Mr Dominic Barretto / Anna Legge                                                                 Tel: [phone]

Yellow Jersey PR Limited (Financial PR)

[e-mail]  

NOTES TO EDITORS

SolGold's exploration projects are located in northern Ecuador, Australia, and the Solomon Islands. In Ecuador, they comprise of a JV with Cornerstone Capital Resources on the Cascabel gold-copper project. In Australia, SolGold holds 100% of the Rannes, Mt Perry, Cracow West and Normanby Projects, all in southeast Queensland and in the Solomon Islands they comprise the Fauro Project (located on Fauro Island), the Florida/Ngella, and the Kuma license on Guadalcanal.

In July 2012, SolGold and Cornerstone Capital Resources Inc. announced that they had signed a Definitive Option Agreement whereby SolGold may acquire up to 85% of Cornerstone's 100% owned 5,000 hectare Cascabel gold-copper-silver property in northern Ecuador.

The Cascabel project is located approximately 120 km north of Ecuador's capital, Quito, 20 km south of the Colombian border, and 75 km inland from the coastal city of San Lorenzo.  The gold-copper porphyry project is located within the Andean western cordillera, host to numerous Tier 1 world class copper-gold deposits through Chile, Peru, Ecuador and Colombia.

At the Rannes project SolGold has announced Indicated and Inferred resources of 18.7 million tonnes at 0.9 g/t gold equivalent (gold + silver) for 550,146 ounces of gold equivalent (296,657 ounces of gold and 10,137,736 ounces of silver; see announcement dated 23 May 2012 for details of the resource statement and gold equivalent ratios).

Exploration continues at Rannes, Mt. Perry, Normanby and Cracow West.

In the Solomon Islands, a JV partner is being sought for the Fauro project to pursue drilling of gold-copper targets defined in the 2011 exploration program.  The Guadalcanal Joint Venture (GJV) with NVL Solomon Islands Limited (a subsidiary of NYSE-listed Newmont Mining Corporation) is to be terminated following finalisation of divestment agreements.

SolGold's strategy is to be an integrated gold and copper discoverer, developer and miner.

SolGold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development, investment, finance and law.  Board and Management have significantly vested interests in the Company, holding approximately 15.1% of its issued share capital.

SolGold is based in Brisbane, Queensland, Australia.  The Company listed on London's Alternative Investment Market in 2006, under the AIM Code 'SOLG' and currently has a total of 544,044,342 fully-paid ordinary shares, 10,700 Convertible Redeemable Preference Shares, 9,472,000 options exercisable at 50p, 1,250,000 options exercisable at 28p and 1,250,000 options exercisable at 14p on issue. Further details concerning the Company's key projects and personnel can be found at www.solgold.com.au.

 

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