SolGold is also working on forming a specialized project management team, which is expected to be fully staffed by the start of the fourth quarter this year, when it anticipates to bring in the first drills.
In tandem with the geotechnical work, SolGold said it was reviewing expressions of interest from independent consultants and firms to support further de-risking activities.
SolGold began its exploration at Cascabel in 2012, which led to the significant discovery at Alpala in early 2014, followed by the identification of the Tandayama-Ameríca deposit in subsequent drilling programs.
The company released in February a new pre-feasibility study (PFS) for Cascabel in which it managed to slash upfront costs. Pre-production capital used for initial mine development, first process plant module and infrastructure is now estimated at $1.55 billion, compared to $2.75 billion from the PFS issued in April 2022.
Investors have been skeptical of SolGold management’s ability to deliver the project to its potential. The company’s share price has halved over the past year, while the company has had to cut spending to stay afloat, prompting a strategic review of its assets.
Bet on growth
To date, the company has achieved key milestones, including obtaining underground exploration geotechnical drilling permits. This allows SolGold to proceed with its underground exploration plans, including the development of the mine’s future portal and declines.
The Cascabel project is the cornerstone of SolGold’s growth strategy and major miners including BHP (ASX: BHP) and Newmont, (NYSE: NEM) through the acquisition of Newcrest and China’s Jiangxi Copper, have already invested in it.
The Ecuadorian government inked a contract with SolGold in June for the development of Cascabel, which is expected to generate an investment of over $4.2 billion during its 28 years of operations, according to figures from the country’s energy ministry.
The company secured in July a $750 million investment from Canada’s Franco-Nevada (TSX, NYSE: FNV) and Osisko Gold Royalties (TSX, NYSE: OR).
According to SolGold, the size of the entire resource indicates the mine’s potential to be a multi-generational asset, potentially one of the 20 largest copper-gold mines in South America.
