and, 5 years on, a $10M company becomes one with a MC of $23M. At least until tomorrow. All seems rather complex / conditional.
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DGR GLOBAL’S STAKE IN SOLGOLD EXPECTED TO RERATE ON BACK
OF SOLGOLD US$750M DEVELOPMENT FINANCING PACKAGE.
SolGold PLC, in which DGR Global Limited holds a 6.6% stake, last night announced that it had entered into a gold only streaming agreement with a syndicate comprising 2/3 Franco Nevada and 1/3 Osisko Royalties for the provision of US$100M in short-term funding to progress the flagship Cascabel copper Gold in northern Ecuador to final feasibility, permitting and final investment decision and a US$650M contribution to project development funding for Cascabel.
The funding package endorses the US$3.2Bn NPV and after-tax rate of return of 24% in SolGold’s March 2024 PFS which adopts conservative metals prices of copper at $3.85/lb and gold at $1750/oz and a staged development program commencing at 12.5 Mtpa for CAPEX of US$1.55Bn and ramping up to 24Mtpa.
Royalties and taxes to the Ecuadorean Government were agreed in the Exploitation contract entered in early June 2024 between SolGold and the Ecuadorean Government.
The short-term US$100M component is deliverable 1/3 on signing and the next two 1/3 tranches on milestones within SolGold’s control. Over the next 1-2 years it is envisaged that these funds will be expended on delivering the necessary permits and funding package components required for development and a Final Definitive Feasibility Study incorporating a number of potential further upsides.
The SolGold share price increased by more than 19% overnight off the back of the announcement to the London Stock Exchange (See LSE Release and attached as APPENDIX A) . Significant value remains to be added through studies into
1. Improved metallurgical recoveries.
2. Inclusion of the Tandayama Resource as an early stage upfront open cuttable development component delivering cash flows at least 2 years faster.
3. Refinement of hydro power and other green power initiatives.
4. Refinement of tailings dam location and design
5. Refinement of mine plan and site layout designs.
The stream is a life of mine stream on gold only and taking delivery of 20% of the gold recovered in concentrate until delivery of 750,000 ounces then dropping to 12% of gold. SolGold has a strategic advantage in a buyback right on change of control over the stream for three years at 50% then dropping to 33% for a further 2 years.
SolGold is continuing to work on other funding sources for the mine development capex including debt and metal concentrate offtake arrangements.