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Announces Successful Completion of New Cascabel Pre-Feasibility Study with Significantly Reduced Initial Capital Cost and 24% Internal Rate of Return
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· Average production[2] of 123ktpa of copper, 277kozpa of gold and 794kozpa of silver - 182ktpa copper equivalent ("CuEq")[3] - with peak[4] copper production of 216ktpa (370ktpa CuEq)
· Pre-production capital of
· 85% of Mineral Reserves are classified as Proven in updated Mineral Reserve Estimate
· Initial 28-year mine plan of
· The Project economics have been calculated based on the economic terms and conditions previously negotiated with the Ecuadorian Government[6]
Key Highlights of the Pre-Feasibility Study
· Excellent economic viability of a
·
· Potential for accelerated cash flow and project development
· The current Cascabel mine plan reflects the profitable exploitation of only 18% of the Alpala measured and indicated mineral resource through a 28-year mine life - the size of the entire resource indicates the mine's potential to be a multi-generational mining asset
· Strong commitment to responsible and sustainable mining practices, including the use of renewable energy (hydropower) and an environmentally conscious Project footprint reduction
"Cascabel is not just a mining project; it's a promise of responsible mining, lasting value for all stakeholders and a sustainable legacy for the planet. With reduced capital needs and lower risk compared to previous approaches, together with our ongoing commitment to sustainability and responsible mining, Cascabel is more than copper and gold; it's a story of innovation, collaboration and a vision for a greener and more prosperous tomorrow for the people of
Summary of Cascabel PFS Results
Table 1: Economic and Operating Summary
Key PFS Outcomes (US$)
|
Base Case |
|
Economic Assumptions |
Copper ($/lb) |
|
Gold ($/oz) |
|
|
Silver ($/oz) |
|
|
Operating Parameters |
Throughput |
Phase 1: 12Mtpa; Phase 2: 24Mtpa |
Initial Project LOM |
28 years |
|
Total Ore Mined |
|
|
Average Copper Grade / Recovery |
0.60% | 88.7% |
|
Average Gold Grade / Recovery |
0.54 g/t | 72.9% |
|
Average |
1.62 g/t | 65.7% |
|
Production
|
Total CuEq Produced |
4.3 Mt |
Total Copper Produced |
2.9 Mt |
|
Total Gold Produced |
6.9 Moz |
|
Total Silver Produced |
18.4 Moz |
|
Annual CuEq Production (peak/average) |
370 kt | 182 kt |
|
Annual Copper Production (peak/average) |
216 kt | 123 kt |
|
Annual Gold Production (peak/average) |
734 koz | 277 koz |
|
Annual Silver Production (peak/average) |
1,159 koz | 794 koz |
|
Capital |
Pre-production |
|
Post-production |
|
|
Operating Costs |
Mining Costs |
|
Processing Costs |
|
|
G&A Costs |
|
|
Tailings, Port and Infrastructure Costs |
|
|
Total Operating Costs |
|
|
Cash Costs |
LOM Average |
|
LOM Average AISC ($/lb Cu) |
|
|
Financials |
Pre-tax NPV8% / IRR |
|
|
After-tax NPV8% / IRR |
|
|
Capital payback period |
4 years |
|
Average Annual Free Cash Flow (first 5 years of production) |
|
|
First 10-Years Free Cash Flow Generation |
|
Reduced Initial Capital Expenditure
Compared to previously considered development scenarios, the
After a ramp-up period of approximately two years, the initial block cave will achieve a production rate of 12 million tonnes per annum ("Mtpa"). The initial cave will extract high-grade ore, averaging approximately 1.45% CuEq for the first ten years of production. The extraction of this high-grade material will not sterilize the surrounding lower-grade ore. The mining operations will be expanded by an additional 12Mtpa, increasing to a total annual production rate of 24Mtpa in year 6. The phase 2 mill expansion is expected to be entirely funded from Project cash flow. This phased approach also allows for scaling other capital items over time, such as the tailings storage facility, the camp and mining equipment.
Lower Technical Risk
The phased development strategy also contributes to a reduction in technical risk. Incrementally advancing the Project provides an opportunity to implement and fine-tune mining and processing methodologies, ensuring a more efficient and stable production process. This approach enhances the Project's overall resilience and minimizes potential challenges associated with large-scale development. A practical height-of-draw for this deposit was determined to be 400m which is considered to be more technically feasible than other alternatives.
Accelerated Cash Flow
The Study's results indicate a strong potential for accelerated cash flow generation. With a reduced initial capital burden and lower technical risk, Cascabel is expected to deliver a quicker path to positive cash flow.
Commitment to Responsible Mining
Integration of Renewable Energy
Project Description
Cascabel is located in northern
Table 2: Cascabel Project Alpala Underground Mineral Resource Estimate (Effective Date
Cut-Off Grade (CuEq%) |
Resource Category |
Tonnage (Mt) |
Grade |
Contained Metal |
||||||
CuEq (%) |
Cu (%) |
Au (g/t) |
Ag (g/t) |
CuEq (Mt) |
Cu (Mt) |
Au (Moz) |
Ag (Moz) |
|||
0.21 |
Measured |
1,576 |
0.64 |
0.43 |
0.35 |
1.16 |
10.0 |
6.7 |
17.5 |
58.6 |
Indicated |
1,437 |
0.39 |
0.28 |
0.20 |
0.71 |
5.6 |
4.0 |
9.3 |
32.7 |
|
Measured + Indicated |
3,013 |
0.52 |
0.35 |
0.28 |
0.94 |
15.6 |
10.7 |
26.8 |
91.3 |
|
Inferred |
607 |
0.36 |
0.26 |
0.19 |
0.56 |
2.2 |
1.5 |
3.7 |
11.0 |
Notes:
1.
2. Reasonable prospects of eventual economic extraction were assessed by enclosing the mineralised material in the block model estimate in a 3D wireframe shape that was constructed with adherence to a minimum mining unit with geometry appropriate for a block cave.
3. The cut-off grade for the shape was defined as the cut-off grade under a breakeven, eventual economic extraction criterion. The cut-off grade of 0.21% CuEq was calculated using (copper grade (%)) + (gold grade (g/t) x 0.683).
4. All material within this shape was reported in the Mineral Resource statement as block caving is a non-selective method, and all material extracted is treated as mill feed.
5. The material inside the shape without a Mineral Resource category was reported as planned dilution.
6. The resulting shape contained planned internal and edge dilution that the QP considers appropriate.
7. Cut-off inputs included:
a. Metal prices of Cu at
b. Recoveries of Cu 93% and Au 83%,
c. Costs including mining, processing, general and administration (G&A), and off-site realization (TCRC), including royalties.
8. The QP considers that the Mineral Resource has reasonable prospects for eventual economic extraction by an underground mass mining method such as block caving.
9. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
10. Mineral Resources are reported inclusive of Mineral Reserves.
11. Figures may not add up due to rounding.
The Mineral Reserves have been estimated for a block caving method and take into account the effect of mixing indicated material with dilution from low-grade or barren material originating from within the caved zone and the overlying cave backs.
Table 3: Cascabel Project Alpala Underground Mineral Reserve Estimate
Mineral Reserve Category |
Tonnage (Mt) |
Grade |
Contained Metal |
||||
Cu (%) |
Au (g/t) |
Ag (g/t) |
Cu (Mt) |
Au (Moz) |
Ag (Moz) |
||
Proven |
457.5 |
0.64 |
0.60 |
1.7 |
2.9 |
8.9 |
24.9 |
Probable |
82.2 |
0.36 |
0.22 |
1.2 |
0.3 |
0.6 |
3.1 |
Total |
539.7 |
0.60 |
0.54 |
1.6 |
3.2 |
9.4 |
28.0 |
Notes:
1. CIM Definition Standards were followed for Mineral Reserves.
2. Mineral Reserves for the
3. The Mineral Reserve reported above was not additive to the Mineral Resource.
4. The Mineral Reserve is based on the November 11, 2023 Mineral Resource.
5. Totals may not match due to rounding.
6. Mineral Reserves are reported using long-term metal prices of
7. Mineral Reserves are constrained within a block cave design, using the following input parameters: height of draw of 400 m; mixing horizon of 350 m; 15% dilution (at 350 m column height); overall operating cost of
8. Units are metric tonnes, metric grams, troy ounces and imperial pounds. Gold ounces and copper pounds are estimates of in-situ material and do not account for processing losses.
9. The Mineral Reserve Estimate as of 31 December 2023 for Alpala was independently verified by
Mining
Underground mining will utilize the block cave mining method, a low-cost, bulk mining method. After a ramp-up period of approximately two years, the initial cave will achieve a production rate of 12Mtpa. The initial cave will extract high-grade ore, averaging 1.5% CuEq for the first ten years of operation. Extraction of this high-grade material will not sterilize surrounding lower-grade ore. The mining operations will be expanded by an additional 12Mtpa, increasing to a total annual production rate of 24Mtpa in year 6 of mine production.
Ore from the mine will be transported to the underground primary crushers by load haul dump loaders ("LHDs") and crushed to minus 160 mm. The crushed ore will be conveyed directly to the coarse ore stockpile adjacent to the mill at the surface.
Process Plant
Ore will be reclaimed from the coarse ore stockpile and conveyed to a conventional semi-autogenous grinding ball mill crusher ("SABC") circuit. Slurry from the ball mill will be pumped to the flotation circuit, where concentrate will be floated, filtered and stored for transport by truck to the port site concentrate storage barn. Tailings will flow by gravity to the Tailings Storage Facility.
Production Plan
Additional mining optimization studies indicated that the optimum production profile for the
Tandayama-Ameríca (TAM) Deposit
The TAM deposit, located approximately 6 kilometres northeast of the Apala deposit, further emphasizes the significant potential of the
The current evaluation of the TAM deposit is not at a PFS level and is, therefore, not included in the
Table 4: Tandayama-Ameríca Mineral Resource Statement (Effective Date
Potential |
Cut-off Grade (CuEq %) |
Resource Category |
Tonnage (Mt) |
Grade |
Contained Metal |
||||
Cu (%) |
Au (g/t) |
CuEq (%) |
Cu (Mt) |
Au (Moz) |
CuEq (Mt) |
||||
Open Pit |
0.16 |
Indicated |
492 |
0.22 |
0.20 |
0.35 |
1.1 |
3.1 |
1.7 |
Inferred |
45 |
0.18 |
0.18 |
0.31 |
0.1 |
0.3 |
0.1 |
||
Underground |
0.19 |
Indicated |
230 |
0.26 |
0.18 |
0.39 |
0.6 |
1.3 |
0.9 |
Inferred |
201 |
0.21 |
0.21 |
0.36 |
0.4 |
1.4 |
0.7 |
||
Total Indicated |
722 |
0.23 |
0.19 |
0.36 |
1.7 |
4.5 |
2.6 |
||
Total Inferred |
247 |
0.21 |
0.21 |
0.35 |
0.5 |
1.6 |
0.9 |
Notes:
1. Dr.
2. Reasonable prospects of eventual economic extraction were assessed by:
a. First presenting the mineralised material in the block model estimate to a conventional Lersch-Grossman open pit optimisation routine based on a cut-off grade of 0.16 % CuEq, and the cost and revenue assumptions listed below. Mineralised material inside the revenue factor one pit and above the cut-off grade were then reported in the "Open pit" section of the Mineral Resource statement.
b. Subsequently, the remaining material was enclosed in a 3D wireframe shape that was constructed with adherence to a minimum mining unit with geometry appropriate for a block cave.
3. The Cut-off grade for the underground shape was defined as the cut-off grade under a breakeven, eventual economic extraction criterion. The cut-off grade of 0.19% CuEq was calculated using (copper grade (%)) + (gold grade (g/t) x 0.683).
4. All material within the underground shape was reported in the "Underground" section of the Mineral Resource statement, as block caving is a non-selective method, and all material extracted is treated as mill feed.
5. The resulting shape contained planned internal and edge dilution that the QP considers appropriate.
6. Cut-off/Cut-off inputs included:
a. Metal prices of Cu at
b. Recoveries of Cu 93% and Au 83%,
c. Costs including mining, processing and general and administration (G&A) and
d. Off-site realization (TCRC), including royalties.
7. The QP considers that the Mineral Resource has reasonable prospects for eventual economic extraction by open pit or an underground mass mining method such as block caving, as presented in the Mineral Resource statement.
8. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
9. Mineral Resources are reported inclusive of those Mineral Resources that were converted to Mineral Reserves.
10. Numbers may not add up due to rounding.
Environmental, Social and Governance ("ESG")
In line with our corporate values,
· Environment: We are deeply committed to managing our carbon footprint and maximizing the use of renewable resources. We aim to minimize the ecological impact of our operations and contribute to a cleaner environment and biodiversity conservation.
· Social:
· Governance:
Over the past decade, we have forged robust community partnerships in
In accordance with Ecuadorian law, an Environmental and Sustainability Impact Assessment ("EISA") is required before obtaining authorization for construction and operations.
Furthermore,
Our commitment to ESG principles remains unwavering, and we are dedicated to ensuring that the
Sensitivity Analysis
A sensitivity analysis was performed on the Study's after-tax NPV8% to examine the sensitivity to commodity prices, capital costs and operating costs.
Figure 1: After-tax NPV8% Sensitivity to Changes in Project Parameters
Figure 2: Metal Price and Discount Rate Sensitivity
Outstanding Opportunities and Upside Options
Opportunities for further optimization of the
· Process plant design optimization following additional metallurgical test work focusing on improved gold recovery and other by-product recovery
· Viability of the TAM open-cut mine to provide early mill feed
· Continue to examine the impacts of utilizing tunnel boring technology to accelerate underground development
· Further define the economic benefits of renewable energy, such as hydro and solar, on the project
· Continue to examine the economic impact of the sub-level cave mining method on the upper portions of the Alpala deposit
· Process plant design optimization following additional metallurgical test work
Next Steps
Qualified Persons
The Qualified Persons for the "
Category |
|
Company |
Mineral Resource Estimate |
Dr. |
|
Mineral Reserve Estimate and Mining (Underground) |
|
|
Mining (Open Pit Tandayama) |
|
|
Environment, Social, Tailings & Water |
Tim Rowles, BSc MSc FAusIMM CP RPEQ |
Knight Piésold |
Metallurgy & Process Plant |
|
|
Surface Infrastructure |
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Financial Evaluation and Marketing |
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|
This announcement was approved for release by
Certain information contained in the announcement would have been deemed inside information.
CONTACTS
|
Tel: +44 (0) 20 3807 6996 |
Tavistock (Media)
|
Tel: +44 (0) 20 7920 3150 |
The Company operates with transparency and in accordance with international best practices.
See www.solgold.com.au for more information. Follow us on "X" @SolGold plc
CAUTIONARY NOTICE
News releases, presentations and public commentary made by
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". 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. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, risks relating to the ability of exploration activities (including assay results) to accurately predict mineralization; errors in management's geological modelling and/or mine development plan; capital and operating costs varying significantly from estimates; the preliminary nature of visual assessments; delays in obtaining or failures to obtain required governmental, environmental or other required approvals; uncertainties relating to the availability and costs of financing needed in the future; changes in equity markets; inflation; the global economic climate; fluctuations in commodity prices; the ability of the Company to complete further exploration activities, including drilling; delays in the development of projects; environmental risks; community and non-governmental actions; other risks involved in the mineral exploration and development industry; the ability of the Company to retain its key management employees and skilled and experienced personnel; and those risks set out in the Company's public documents filed on SEDAR+ at www.sedarplus.ca. 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 findings in the PFS and the implementation of the Cascabel project are subject to all the necessary approvals, permits, internal and regulatory requirements and further works. The estimates are indicative only and are subject to market and operating conditions. They should not be interpreted as guidance. The information contained herein is a summary only and is qualified in its entirety by reference to the Technical Report (as defined herein).
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.
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 Alpala porphyry copper-gold deposit at its Cascabel project to represent intersections of a World Class deposit on the basis of comparisons with other drilling intersections from World Class deposits, some of which have become, or are becoming, producing mines and on the basis of available independent opinions which may be referenced to define the term "World Class" (or "Tier 1").
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 (1Singer and Menzie, 2010; 2Schodde, 2006; 3Schodde and Hronsky, 2006; 4Singer, 1995; 5Laznicka, 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
The Company cautions that the
On this basis, reference to the
[1] Based on long-term commodity price assumptions of (US$):
[2] Average based on years 6 - 23 at full nameplate capacity.
[3] Assumptions for copper equivalent calculations as provided in Table 1 for commodity prices, grades and recoveries. Copper equivalent production (by-product basis) = Recovered Cu tonnes + (Au Price US$/oz) / (Cu Price US$/t) x (Recovered gold ounces) + (Ag Price US$/oz) / (Cu Price US$/t) x (Recovered silver ounces).
[4] Peak based on year 6 from start of production.
[5] See Table 3: Cascabel Project Alpala Underground Mineral Reserve Estimate for details including cut-off assumptions.
[6] See