SolGold Temporarily Suspends Site Work in Ecuador amid COVID-19 Concerns
BISHOPSGATE, LONDON / ACCESSWIRE / March 25, 2020 / The Board of Directors of SolGold (LSE:SOLG)(TSX:SOLG) wishes to provide an update regarding its operations in Ecuador amid growing concerns regarding the spread and seriousness of COVID-19.
The Emergency Operations Committee (COE) of Ecuador announced a 'Stay at home' policy in Ecuador which has meant the temporary closure of businesses across the country. SolGold is committed to the safety and wellbeing of its employees and communities, and as a result of the state policy and the reaction from many communities within its areas of operations to the potential for transfer of COVID-19, the Company is complying with government preventative measures and has reduced operations throughout Ecuador.
Chief Executive Officer Nick Mather said, ''In an effort to reduce potential transmission of COVID-19, SolGold is actively monitoring all its employees and will continue to do so for the next 14 days. The Company has also reduced to essential personnel only. The employees at project sites and office will continue to follow government advice on prevention of this disease''.
''Where possible, the Company's geologists, administration, technical and financial teams are working from home and will continue to progress SolGold's projects using the extensive database. The Alpala prefeasibility study is continuing externally, using the available information which has already been substantially gathered from site', he said.
The Company is and will continue to support its employees, will carry on contributing to the economy as far as possible for the immediate future and will monitor the management of the workforce and interactive COVID-19 management protocols. SolGold is actively supporting local communities in their efforts to curtail the spread of the virus.
As the situation is dependent on actions at regional, state, national and international levels, SolGold cannot currently indicate the duration of the temporary partial suspension of field work on the Company's projects.
By order of the Board
Information in this report relating to the exploration results is based on data reviewed by Mr Jason Ward ((CP) B.Sc. Geol.), the Chief Geologist of the Company. Mr Ward is a Fellow of the Australasian Institute of Mining and Metallurgy, holds the designation FAusIMM (CP), and has in excess of 20 years' experience in mineral exploration and is a Qualified Person for the purposes of the relevant LSE and TSX Rules. Mr Ward consents to the inclusion of the information in the form and context in which it appears.
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SolGold is a leading exploration company focussed on the discovery, definition and development of world-class copper and gold deposits. In 2018 SolGold's management team was recognised by the 'Mines and Money' Forum as an example of excellence in the industry, and continues to strive to deliver objectives efficiently and in the interests of shareholders. SolGold is the largest and most active concession holder in Ecuador and is aggressively exploring the length and breadth of this highly prospective and gold-rich section of the Andean Copper Belt.
The Company operates with transparency and in accordance with international best practices. SolGold is committed to delivering value to its shareholders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact.
SolGold employs a staff of 737 employees of whom 98% are Ecuadorean. This is expected to grow as the operations expand at Alpala, and in Ecuador generally. SolGold focusses its operations to be safe, reliable and environmentally responsible and maintains close relationships with its local communities. SolGold has engaged an increasingly skilled, refined and experienced team of geoscientists using state of the art geophysical and geochemical modelling applied to an extensive data base to enable the delivery of ore grade intersections from nearly every drill hole at Alpala. SolGold has 86 geologists, of whom 30% are female, on the ground in Ecuador exploring for economic copper and gold deposits.
About Cascabel and Alpala
The Alpala deposit is the main target in the Cascabel concession, located on the northern section of the heavily endowed Andean Copper Belt, the entirety of which is renowned as the base for nearly half of the world's copper production. The project area hosts mineralisation of Eocene age, the same age as numerous Tier 1 deposits along the Andean Copper Belt in Chile and Peru to the south including La Escondida and Chuquicamata. The project base is located at Rocafuerte within the Cascabel concession in northern Ecuador, an approximately three-hour drive on sealed highway north of the capital Quito, close to hydroelectric water, power supply and Pacific ports.
Having fulfilled its earn-in requirements, SolGold is a registered shareholder with an unencumbered legal and beneficial 85% interest in ENSA (Exploraciones Novomining S.A.) which holds 100% of the Cascabel concession covering approximately 50km2. The junior equity owner in ENSA is required to repay 15% of costs since SolGold's earn in was completed, from 90% of its share of distribution of earnings or dividends from ENSA or the Cascabel concession. It is also required to contribute to development or be diluted, and if its interest falls below 10%, it shall reduce to a 0.5% NSR royalty which SolGold may then acquire for US$3.5m.
Over 227,000m of diamond drilling has been completed on the project. The Cascabel exploration program is currently focussed on collection of geotechnical data for the purpose of mine development planning to be detailed in the PFS and proposed DFS. Further drill testing of the evolving Aguinaga prospect drill testing of the Trivinio target has commenced and numerous other untested targets, namely at Moran, Cristal, Tandayama-America and Chinambicito, are flagged for future drill testing as overall program demands and funding constraints allow.
The 15 November 2018 Alpala MRE#2 update was estimated from 68,173 assays. Drill core samples were obtained from a total of 133,576m drilled from 128 diamond drill holes, including 75 drill holes with 34 daughter holes, 8 redrills, and 11 over-runs. Full assay data was received from holes 1-67 while partial assay data was received from holes 68 to 75. In contrast, the December 2017 maiden MRE#1 was estimated from 26,814 assays obtained from 53,616m of drilling comprising 45 drill holes, including 10 daughter holes and 5 redrills.
The November 2018 Alpala updated Mineral Resource Estimate (MRE#2) totals a current:
Investors should consult the technical report dated 3 January 2019 for a detailed account of the assumptions on which these estimates were based as well as any known legal, political, environmental and other risks that could materially affect the development of the resources.
Advancing Alpala towards development
The resource at the Alpala deposit boasts a high grade core which is targeted to facilitate early cashflows and an accelerated payback of initial capital. SolGold is currently assessing financing options available to the Company for the development of the Alpala mine following completion of the Definitive Feasibility Study.
The results of the Preliminary Economic Assessment (PEA) at Alpala were published on 20 May 2019, highlighting the following key aspects:
Full results and all details of the PEA are available in the Company's market release of 20 May 2019. SolGold is currently preparing a Pre-Feasibility Study which is targeted subject to funding and securing freehold titles, to be completed by end of Q3 2020.
SolGold's regional exploration drive
SolGold is using its successful and cost-efficient blueprint established at Alpala, and Cascabel generally, to explore for additional world class copper and gold projects across Ecuador. SolGold is the largest and most active concessionaire in Ecuador.
Other than its 85% ownership in ENSA, The Company wholly owns four other subsidiaries (Green Rock Resources S.A, Carnegie Ridge Resources S.A, Valle Rico Resources S.A and Cruz del Sol S.A. active throughout the country that are now focussed on thirteen high priority gold and copper resource targets, several of which the Company believes have the potential, subject to resource definition and feasibility, to be developed in close succession or even on a more accelerated basis compared to Alpala.
SolGold is listed on the London Stock Exchange and Toronto Stock Exchange (LSE/TSX: SOLG). The Company has on issue a total of 1,923,321,033 fully-paid ordinary shares and 176,662,000 share options.
Quality Assurance / Quality Control on Sample Collection, Security and Assaying
SolGold operates according to its rigorous Quality Assurance and Quality Control (QA/QC) protocol, which is consistent with industry best practices.
Primary sample collection involves secure transport from SolGold's concessions in Ecuador, to the ALS certified sample preparation facility in Quito, Ecuador. Samples are then air freighted from Quito to the ALS certified laboratory in Lima, Peru where the assaying of drill core, channel samples, rock chips and soil samples is undertaken. SolGold utilises ALS certified laboratories in Canada and Australia for the analysis of metallurgical samples.
Samples are prepared and analysed using 100g 4-Acid digest ICP with MS finish for 48 elements on a 0.25g aliquot (ME-MS61). Laboratory performance is routinely monitored using umpire assays, check batches and inter-laboratory comparisons between ALS certified laboratory in Lima and the ACME certified laboratory in Cuenca, Ecuador.
In order to monitor the ongoing quality of its analytical database, SolGold's QA/QC protocol encompasses standard sampling methodologies, including the insertion of certified powder blanks, coarse chip blanks, standards, pulp duplicates and field duplicates. The blanks and standards are Certified Reference Materials supplied by Ore Research and Exploration, Australia.
SolGold's QA/QC protocol also monitors the ongoing quality of its analytical database. The Company's protocol involves Independent data validation of the digital analytical database including search for sample overlaps, duplicate or absent samples as well as anomalous assay and survey results. These are routinely performed ahead of Mineral Resource Estimates and Feasibility Studies. No material QA/QC issues have been identified with respect to sample collection, security and assaying.
Reviews of the sample preparation, chain of custody, data security procedures and assaying methods used by SolGold confirm that they are consistent with industry best practices and all results stated in this announcement have passed SolGold's QA/QC protocol.
See www.solgold.com.au for more information. Follow us on twitter @SolGold_plc
News releases, presentations and public commentary made by SolGold plc (the 'Company') and its Officers may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to interpretations of exploration results to date and the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's Directors. Such forward-looking and interpretative statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such interpretations and forward-looking statements.
Accordingly, the reader should not rely on any interpretations or forward-looking statements; and save as required by the exchange rules of the TSX and LSE or by applicable laws, the Company does not accept any obligation to disseminate any updates or revisions to such interpretations or forward-looking statements. The Company may reinterpret results to date as the status of its assets and projects changes with time expenditure, metals prices and other affecting circumstances.
This release may contain 'forward‑looking information' within the meaning of applicable Canadian securities legislation. Forward‑looking information includes, but is not limited to, statements regarding the Company's plans for developing its properties. Generally, forward‑looking information can be identified by the use of forward-looking terminology such as 'plans', 'expects' or 'does not expect', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or 'does not anticipate', or 'believes', or variations of such words and phrases or state that certain actions, events or results 'may', 'could', 'would', 'might' or 'will be taken', 'occur' or 'be achieved'.
Forward‑looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward‑looking information, including but not limited to: transaction risks; general business, economic, competitive, political and social uncertainties; future prices of mineral prices; accidents, labour disputes and shortages and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward‑looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
The Company and its officers do not endorse, or reject or otherwise comment on the conclusions, interpretations or views expressed in press articles or third-party analysis, and where possible aims to circulate all available material on its website.
The Company recognises that the term 'World Class' is subjective and for the purpose of the Company's projects the Company considers the drilling results at the growing Alpala Porphyry Copper Gold Deposit at its Cascabel Project to represent intersections of a 'World Class' deposit. The Company considers that 'World Class' deposits are rare, very large, long life, low cost, and are responsible for approximately half of total global metals production.
'World Class' deposits are generally accepted as deposits of a size and quality that create multiple expansion opportunities, and have or are likely to demonstrate robust economics that ensure development irrespective of position within the global commodity cycles, or whether or not the deposit has been fully drilled out, or a feasibility study completed.
Standards drawn from industry experts (1) Singer and Menzie, 2010; (2) Schodde, 2006; (3) Schodde and Hronsky, 2006; (4) Singer, 1995; (5) Laznicka, 2010) have characterised 'World Class' deposits at prevailing commodity prices. The relevant criteria for 'World Class' deposits, adjusted to current long run commodity prices, are considered to be those holding or likely to hold more than 5 million tonnes of copper and/or more than 6 million ounces of gold with a modelled net present value of greater than USD 1 Billion.
The Company and its external consultants prepared an initial Mineral Resource Estimate at the Cascabel Project in December 2017. Results of the updated Mineral Resource Estimate, released in November 2018, are summarised in Table B attached.
The updated Mineral Resource Estimate was completed from 133,576m of drilling, comprising 128 diamond drill holes, including 75 drill holes, 34 daughter holes, 8 re-drills, and 11 over-runs, and represents full assay data from holes 1-67 and partial assay data received from holes 68-75. There remains strong potential for further growth from more recent drilling results, and continue rapid growth of the deposit.
Any development or mining potential for the project remains speculative.
Drill hole intercepts have been updated to reflect current commodity prices, using a data aggregation method, defined by copper equivalent cut-off grades and reported with up to 10m internal dilution, excluding bridging to a single sample. Copper equivalent grades are calculated using a gold conversion factor of 0.63, determined using an updated copper price of USD3.00/pound and an updated gold price of USD1300/ounce. True widths of down hole intersections are estimated to be approximately 25-70%.
On the basis of the drilling results to date and the results of the Alpala Maiden Mineral Resource Estimate, the reference to the Cascabel Project as 'World Class' (or 'Tier 1') is considered to be appropriate. Examples of global copper and gold discoveries since 2006 that are generally considered to be 'World Class' are summarised in Table A.
References cited in the text:
Table A: Tier 1 global copper and gold discoveries since 2006. This table does not purport to be exhaustive exclusive or definitive.
Table B: Alpala Mineral Resource Estimate updated effective 16 November 2018.
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SOURCE: SolGold PLC
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