Cascabel Ownership & Project Update

RNS Number : 8279M

SolGold PLC

30 August 2013

 



30 August 2013

SolGold Plc

("SolGold" or the "Company")

SolGold Increases Ownership of ENSA to 50%

Mobilisation of Drill Rig to Pad 1 on Schedule

Drilling at Cascabel Expected First Week of September

Highlights:

Ø  Equity interest in ENSA increased from 30% to 50%.

Ø  Equity interest in TSX-listed Cornerstone increased to 11.7%.

Ø  Mobilisation of drill rig progressing on schedule.

Ø  Commencement of drilling expected in first week of September.

The Board of SolGold is pleased to report on progress at its Cascabel Project, the Company's copper-gold project in northern Ecuador.  

SolGold now holds a 50% interest, and can earn up to 85% interest, in Exploraciones Novomining S.A. ("ENSA"), an Ecuadorean registered company which holds 100% of the Cascabel concession in northern Ecuador.  Cornerstone Capital Resources Inc. ("Cornerstone") currently holds the other 50% of ENSA.  Cornerstone has been operating in Ecuador for six years and employs Ecuadorian geologists to carry out exploration and related administrative functions for the Cascabel Project.

Commenting on today's update, CEO Alan Martin stated: "This increase in equity ownership of ENSA has always been part of SolGold's strategy, which is to provide significant exposure to a potential world class copper gold porphyry deposit to its shareholders.  SolGold also has the right to increase its ownership in ENSA further to 85%."

Alan goes on to state:

"With the receipt of the Environmental Licence from the Ecuadorian Ministry of Environment, announced on 27 August, and drilling expected to start in the first week of September this increase of equity in ENSA comes at an exciting time for SolGold shareholders.  Working alongside the highly qualified and experienced Cornerstone geologists as well as a pro-mining government has assisted us to manage the project efficiently.  The Alpala prospect covers an extensive area, over 2km², and has the potential to host a significant copper-gold deposit.  With the continued rate of development we look forward to updating shareholders with visual results of drill core in September followed up with assays in October".

Equity Interests in Cornerstone Increased

On 28 August, SolGold notified Cornerstone that it would elect to increase its equity interest in ENSA from 30% to 50% and made the CAD$500,000 payment due in accordance with the agreement between the parties, which was renegotiated in February 2013.

As provided by the agreement, the CAD$500,000 payment took the form of a placement in the capital of Cornerstone, meaning SolGold now holds a total of 18,653,092 shares or 11.7% of the capital of Cornerstone.

Environmental Licence Received

The Company announced on 27 August that the Environmental Licence was signed by the Minister of Environment, Dr Lorena Tapia, on Friday 23 August.

Mobilisation of Drill Rig to Drill Pad 1 

Construction of drill pad 1 commenced on Saturday 24 August.  Cornerstone has advised that mobilisation of the drill rig and associated equipment is progressing according to schedule, and drilling is expected to start in the first week of September.

By order of the Board

Karl Schlobohm

Company Secretary

Contacts:

Alan Martin

SolGold Plc (Chief Executive Officer)                                                     Tel: [phone]

[e-mail]

Nicholas Mather                                                                                              Tel: [phone]

SolGold plc (Executive Director)

[e-mail] 

Karl Schlobohm                                                                                               Tel: [phone]

SolGold plc (Company Secretary)

[e-mail]  

Ewan Leggat / Katy Birkin                                                                            Tel: [phone]

SP Angel Corporate Finance LLP (Broker)

[e-mail]  

Stephen Weir                                                                                                  Tel: [phone]

RFC Ambrian Limited (Nominated Advisor)

[e-mail] 

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 consist of a JV with Cornerstone Capital Resources Inc. on the Cascabel copper-gold 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), and the Lower Koloula and Kuma licenses, both of which are located on Guadalcanal.  The Florida prospecting licence was permitted to expire as part of SolGold's strategy to become increasingly focussed on the preceding tenements in the Solomon Islands, Queensland and Ecuador.

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 copper-gold 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).  The Rannes project is currently under review.

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. 

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 (AIM) in 2006, under the AIM code 'SOLG' and currently has a total of 553,354,342 fully-paid ordinary shares, 1,500 Convertible Redeemable Preference Shares, 10,788,000 options exercisable at 50p, 2,750,000 options exercisable at 28p and 1,750,000 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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