Canada’s Cornerstone has a 6.9% stake in SolGold, making it the miner’s fourth-biggest shareholder after BHP, Newcrest and DGR Global. The Ontario-based junior also holds a 15% interest in the Cascabel concession’s holding company ENSA.
The joint venture partners also agreed to support management in ongoing efforts to finalise the delivery of a new technical report.
The deal, which ends a two-year standoff between the parties, will to explore financing options for the mine.
“For too long our companies have been pulling in different directions,” SolGold interim CEO Keith Marshall, who took over from Nick Mather at the end of March, said in the statement. “This initiative provides an opportunity for both companies to put away their differences and to work together for the collective good of the Cascabel project,” he said.
The parties locked horns after SolGold made an unsolicited offer for Cornerstone last year, the third since 2017. The junior not only rejected the bid, but called on fellow shareholders to overhaul SolGold’s board.
The Ecuador-focused miner was also at the centre of a dispute with BHP, its biggest shareholder, and Newcrest last year. It happened after securing a financing package of up to $150 million and a $15 million bridge loan with Franco Nevada (TSX, NYSE: FNV). This triggered worries about the efficiency of SolGold’s funding methods for the project.
Focus on Alpala
Mather, who remained in SolGold as director, said he was “100% supportive” of the joint initiative. “I believe it can maximize value for SolGold shareholders, which has been my objective from the very beginning.”
Cornerstone president Brooke Macdonald said the focus should be on lowering the development risk at Cascabel and accessing the high-grade core at Alpala, the largest deposit found at the copper-gold asset, located 180 km north of Ecuador’s capital, Quito.
Alpala currently has 442-million tonnes at 1.40% copper-equivalent in the measured and indicated category, including 359-million tonnes at 1.47% copper-equivalent in the measured category.
Ecuador has gained ground as a mining investment destination over the past two years, but opposition to the extraction of the country’s resources could thwart the government’s plan to attract $3.7 billion in mining investments by 2022.
Last year, mining in Ecuador generated $810 million in exports, $430 million in taxes and $374 million in foreign direct investment.
