JV Article: Copper is the New Iron Ore, and Ecuador is the New Pilbara

Emerging copper-gold developer SolGold (TSX: SOLG; LON: SOLG) is steadily progressing toward its ultimate goal: to develop a province of discoveries across the under-explored Ecuadorean section of the Andean Copper Belt.

SolGold is continuing to drill its Alpala copper-gold project in northern Ecuador, where in late 2018 it doubled its resource and substantially upgraded inferred resources to the indicated category.

According to a November 2018 resource update, Alpala contains 2.05 billion indicated tonnes grading 0.41% copper and 0.29 gram gold per tonne, or 0.6% copper equivalent, for 8.5 million tonnes copper and 19.4 million oz. gold, or 12.2 million tonnes copper equivalent.

The project also contains 900 million inferred tonnes at 0.27% copper and 0.13 gram gold, or 0.35% copper equivalent, for 2.5 million tonnes copper and 3.8 million oz. gold, or 3.2 million tonnes copper equivalent.

SolGold now classifies 70% of Alpala's overall resource in the indicated category, up from 40% in 2017.

The company is currently turning 12 drill rigs at Alpala focussed on resource expansion, plus metallurgical and hydrogeological studies. At the same time, SolGold is committed to exploration programs across a suite of concessions along the length of Ecuador.

To date, SolGold's exploration teams have identified 11 priority targets through its 100% owned subsidiaries - Carnegie Ridge, Valle Rico, Cruz Del Sol and Green Rock - and several of them are ready for drilling in 2019. The company's subsidiaries aim to implement the exploration blueprint SolGold developed at Alpala to quickly and efficiently identify additional porphyry copper-gold deposits in Ecuador.

Recent exploration at its Porvenir target shows what the company calls a kilometre-wide "broad zone of north east trending porphyry mineralisation." Rock-saw sampling on outcrops in the area revealed intersections of 62.4 metres grading 0.71% copper and 0.71 gram gold as well as 29.5 metres at 1.01% copper and 0.89 grams gold.

Project Manager Alfredo Cruz mentoring junior geologists. Credit: SolGold.

Once it has its drill permits approved, the company will focus on exploring Porvenir, as well as its Blanca, La Hueca and Rio Amarillo regional targets. The company says the scale of its project and prospective ground demonstrate why it has the opportunity to become an Ecuadorean focussed mining major, without resorting to dilutive and erosive joint ventures.

"We've had 12 drill rigs in operation over the past year and 86 geologists on the ground - half of those at Alpala," SolGold CEO Nick Mather says. "I don't think many majors can match that exploration effort."

He notes that the company has made discoveries at Alpala for just US$1.47 per oz. gold equivalent, or 34 cents per lb. copper equivalent.

"All day, every day, the best way to add value for shareholders is to explore, and we're experts at that by any measure," Mather says.

SolGold is active in the most under-explored section of Ecuador. It has strong support from the country's government, which is intent on responsibly developing its mining industry. As Mather says, the upside for both Ecuador and SolGold shareholders is immense. As a result, the company remains focussed on continuing to earn, and maintain, Ecuador's endorsement.

"At every level, community involvement is important," Mather says. "Locally, for training, employment, commercial patronage and social security assistance; regionally, for infrastructure, permitting and planning; and federally, to deal with industrial development permitting and fiscal planning. Our approach is to integrate SolGold's aims with Ecuador's."

Mather goes on to compare Ecuador with Australia's famed Pilbara iron ore district, pointing out that miners will need to address increasing copper demand with entirely new, well-endowed deposits.

"SolGold's new provincial Ecuador portfolio is the solution," he says. "Since first stepping into Ecuador in 2012, we've seen Alpala as just the start of a long pipeline that will help transform Ecuador's economy.

"The electrification of the world has seen a shift in demanded resources, with copper replacing iron ore at the top of the food chain. Ecuador is the new Pilbara."

CSR team carrying out soil inspections on site. Credit: SolGold.

The company plans to table a preliminary economic assessment at Alpala this year, and then transition directly into the project's prefeasibility stage. From there it aims to keep moving quickly.

"We are putting together a financing package, and aim to bring final feasibility, financing and permitting all by the end of 2020," Mather says.

SolGold holds an unconditional registered and beneficial interest in Cascabel and Alpala through its 85% interest in Exploraciones Nova Mining SA and Cornerstone Capital owns the 15% balance. SolGold has announced its intention to bid 0.55 SolGold shares for each Cornerstone share. The premium offered at the time of SolGold's announcement was 20% and Mather notes that the Cornerstone market has not closed the gap.

"SolGold offers Cornerstone shareholders the opportunity for participation in the huge exploration upside through the rest of Ecuador," Mather says. "Based on our discovery costs to date at Alpala and the extraordinary results we are seeing in the mapping and sampling phases on these projects, we've got every confidence we'll find additional deposits out there. You don't get that currently if you stay as a Cornerstone shareholder."

He says the bid also offered Cornerstone shareholders the opportunity to avoid a difficult financing contribution when Alpala reached feasibility, targeted for end 2020. Subject to final numbers it is likely to be a substantial obligation for a project of this nature and if Cornerstone don't contribute at 10% or more, it dilutes to a 0.5% NSR which SolGold can buy for just US$3.5 million.

"We're offering Cornerstone shareholders a unique opportunity," Mather says.

Shares of SolGold are currently trading in Toronto at 63 ? with a 52 week range of 32 ? to 71 ?. The company has a $1.1 billion market capitalization, US$80 million in the bank, and strong support from shareholders like Australian majors BHP Group and Newcrest Mining. The company intends to leverage its first-mover advantage to continue growing its Ecuadorian assets.

Says Mather: "Our holistic approach to community and the licence to operate rather than piecemeal opportunism has defined SolGold as a unique investment opportunity."

- The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by SolGold, and compiled in cooperation with The Northern Miner. Visit www.solgold.com.au for more information.