Ecuador-focused miner SolGold (LON, TSX: SOLG) is trimming its exploration portfolio in a bid to free up cash to focus on its best targets as it advances development of the giant Cascabel copper-gold project, located 180 km north of the country’s capital, Quito.
The miner intends to shed 10 of the 72 exploration concessions held within its four subsidiaries in the South American country. The move, it said, would mean an impairment charge of $3.1 million, but would also lower its exploration commitments by about $75.6 million.
“Our success to date in Ecuador with discoveries at Alpala, Tandayama and Cacharposa endorses our targeting and field strategy,” Jason Ward, SolGold’s executive director of exploration, said in the statement.
SolGold noted it is keeping all its high priority projects, adding that it continues to seek strategic partners to advance certain projects. The company said discussions are underway with “several” interested parties.
The company had $109.6 million in cash at the end of the June quarter, which it deems sufficient to support its ongoing activities.
Sixth largest copper mine
Its Cascabel project is one of the most ambitious mining projects in Ecuador, which hopes to develop mineral resources to spur its sluggish economy.
Alpala, the largest deposit found at Cascabel so far, has measured and indicated resources of 2.7 billion tonnes grading 0.53% copper-equivalent (0.37% copper, 0.25 grams gold per tonne, and 1.08 parts per million silver) for 9.9 million tonnes of contained copper, 21.7 million oz. gold and 92.2 million oz. of silver.
The deposit is so important that Ecuador’s Energy Ministry said in 2019 that it “could become the largest underground silver mine, third-largest gold and sixth-largest copper in the world.”
Once developed, Cascabel is expected to produce an average of 150,000 tonnes of copper, 245,000 ounces of gold and 913,000 ounces of silver in concentrate per year during its 55-year life-of-mine.
Over the first 25 years of mining, the average annual production is expected to be 207,000 tonnes of copper, 438,000 ounces of gold and 1.4 million ounces of silver.
In the last two years, Ecuador has attracted a flurry of interest from big miners looking to increase their exposure to copper. The highly conductive metal is in demand for use in renewable energy and electric vehicles, but big, new deposits are rare.