TIDMSOLG
RNS Number : 0908Z
SolGold PLC
15 September 2020
15 September 2020
SolGold plc
("SolGold" or the "Company")
Clarification to Technical Disclosure and Intention to Amend
Technical Report
The Board of SolGold (LSE and TSX code: SOLG) ann o unces that
as a result of a rev iew by staff of the Ontario Securities Co
mmission ("OSC") the Co m pany is issuing the f ollowing news
release r e garding its technical disclosure made with respect to
its flagship Alpala Pro j ect in Ecuad or.
Regarding the documents:
-- Technical Report titled "Cascabel Property NI 43-101
Technical Report, Alpala Mineral Resource Estimation, May 2020"
("MRE#3") which has an effective date 11 November 2019 and a
Signature date of 22 May 2020.
-- Technical Report titled "Cascabel Project, Northern Ecuador
Alpala Copper-Gold-Silver Deposit NI 43-101 Technical Report on
Preliminary Economic Assessment" (the "PEA") with an Effective Date
of 25-Mar-2019 and an Amended Date of 6-Nov-2019.
OSC staff have concluded that MRE#3 does not comply with the
requirements of National Instrument 43-101 Standards of Disclosure
for Mineral Projects (NI 43-101) and the requirements of Form
43-101F1 Technical Report (Form 43-101F1). The basis for the
default relates to the Technical Report not containing information
for each of the content items required by Form 43-101F1 in order to
support the Company's continued disclosure of the results of the
2019 PEA and the stage of development of the Alpala Project (i.e.
an "Advanced Property" as defined in NI 43-101).
OSC staff highlighted to SolGold that there must only be one
current technical report on a property at any point in time. When
an issuer files a new technical report, it will replace any
previously filed technical report as the current technical report
on that property.
SolGold acknowledges the defaults raised by staff of the OSC as
a result of its review. At the request of staff of the OSC, SolGold
will address these through the removal of references to the
superseded PEA and filing an amended MRE#3 on SEDAR. It is expected
the amended report will be filed by the end of September 2020. As
the 2019 PEA results have not been carried forward in the new
technical report, SolGold will not refer to the 2019 PEA results in
ongoing public disclosures and reiterates:
"As a result of the completion of MRE#3 and the impending
release of the NI 43-101 technical report, the PEA will be
effectively superseded by the MRE#3 technical report as the current
technical report on the Alpala Project and should no longer be
considered current." ( SolGold news release 7 April 2020)
The following points (listed in MRE#3) highlight differences in
the underlying assumptions between MRE#3 and the Resource Estimate
used in the PEA (MRE#2):
-- 83,650 m of drilling have been added between the two
estimates, bringing the drill meters informing the estimate from
133,576 m in MRE#2 to 217,226 m for MRE#3. This has materially
increased the amount of information supporting the MRE#3 by
63%.
-- The lithology and grade wireframes have been updated using
new drill hole information and revised structural trend surfaces.
During this revision in the current MRE, more attention has been
paid to ensuring that the grade wireframes are well-supported by
geological information, including b-vein percentages and local
structural trends. This has resulted in significant changes in the
geological interpretation in terms of geometry and volume of the
wireframes compared to the previous estimate.
-- The estimation domain definitions, variographic, search and
estimation parameters have all been updated based on a more
detailed understanding of the deposit, the revised geological
interpretation, and the new drill hole information. All these
changes to the estimation process may have produced materially
different estimated grades and tonnages.
-- The CuEq formula has changed based on up to date third party
metal price research. It is currently Cu% + (Au g/t * 0.613),
whereas previously it was Cu% + (Au g/t * 0.63). This has
effectively reduced the MRE#3 CuEq grade relative to MRE#2 by
approximately 3%,
-- The "Estimation of Mineral Resources and Mineral Reserves
Best Practice Guidelines" (CIM, 2019), referenced in NI 43-101,
have been updated between the two estimates in November 2019. This
has resulted in materially different MRE classification and
reporting criteria being used between the two estimates:
o The current Mineral Resource classification has been based on
a quantitative drill hole spacing method that is referenced in CIM
(2019), whereas previously, a subjective classification method has
been used
o The current Mineral Resource statement has been constrained by
an optimized shape to ensure the criteria for reasonable prospects
for eventual economic extraction have been met in accordance with
NI 43-101 and CIM (2019).
The combined effect of these underlying assumptions result in a
material difference between MRE#2 and MRE#3. As MRE#2 forms the
basis of the PEA results, the sections of the PEA report pertaining
to Advance Properties (NI 43-101 Items 15 to 22) are no longer
relevant and staff of the OSC have requested that the public be
advised that they should not be relied on by investors.
SolGold confirms that a new NI 43-101 Technical Report will be
developed as part of the ongoing Preliminary Feasibility Study
("PFS") and is expected to be filed by the end of December 2020.
The PFS Technical Report will be based on MRE#3 which delivered the
conversion of considerable tonnages into the Measured Resource
category, plus the addition of 1.6 Mt Cu, 2.5 Moz Au, and 92.2 Moz
Ag (not previously estimated) to Measured plus Indicated Mineral
Resources. Revised Metallurgical Recovery data, a more refined
development and mining plan, and increased gold price assumptions
will also be embodied in the forthcoming PFS. SolGold will issue a
press release notifying the public when the new 43-101 Technical
Report is filed on SEDAR.
By order of the Board
Karl Schlobohm
Company Secretary
Qualified Persons:
Information in this report relating to technical disclosure 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.
Information in this report relating to the Mineral Resource
Estimate was reviewed by Mrs Cecilia Artica MSc and Dr Gregory
Harbort.
Mrs Artica is a Registered Member of The Society for Mining
Metallurgy and Exploration and has in excess of 20 years'
experience in Mineral Resource Estimation and mineral exploration.
She is an independent Qualified Person for the purposes of the
relevant LSE and TSX Rules. Mrs Artica consents to the inclusion of
the information in the form and context in which it appears.
Dr Harbort is a Fellow and CP of the Austalasian Institute of
Mining and Metallurgy, and a Member of the SME and CIM. He has 35
years' experience in mineral processing and metallurgy. He is an
independent Qualified Person for the purposes of the relevant LSE
and TSX Rules. Dr Harbort consents to the inclusion of the
information in the form and context in which it appears.
CONTACTS
Nicholas Mather Tel: +61 (0) 7 3303 0665
SolGold Plc (Chief Executive Officer) +61 (0) 417 880 448
nmather@solgold.com.au
Karl Schlobohm
SolGold Plc (Company Secretary) Tel: +61 (0) 7 3303 0661
kschlobohm@solgold.com.au
Ingo Hofmaier
SolGold Plc (GM - Project & Corporate Tel: +44 (0) 20 3823 2131
Finance) ihofmaier@solgold.com.au
Gordon Poole / Nick Hennis
Camarco (Financial PR / IR) Tel: +44 (0) 20 3757 4997
solgold@camarco.co.uk
Andrew Chubb Tel: +44 (0) 20 7907 8500
Hannam & Partners (Joint Broker and Financial
Advisor)
solgold@hannam.partners
Ross Allister / David McKeown Tel: +44 (0)20 7418 8900
Peel Hunt (Joint Broker and Financial
Advisor)
solgold@peelhunt.com
James Kofman / Darren Wallace Tel: +1 416 943 6411
Cormark Securities Inc. (Financial Advisor)
dwallace@cormark.com
Follow us on twitter @SolGold_plc
ABOUT SOLGOLD
SolGold is a leading resources 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.
Dedicated stakeholders
SolGold employs a staff of over 600 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 database to enable the delivery
of ore grade intersections from nearly every drill hole at Alpala.
SolGold has over 80 geologists 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. 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 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 50km(2) .
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 acquire for US$3.5m.
Advancing Alpala towards development
The resource at the Alpala deposit contains a high-grade core
which will be 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.
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.
The Company wholly owns four other subsidiaries 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
2,072,213,495 fully-paid ordinary shares and 113,175,000 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
CAUTIONARY NOTICE
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.
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MSCGPUGABUPUGQA
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