TIDMSOLG
RNS Number : 2338R
SolGold PLC
25 October 2023
25 October 2023
SolGold plc
(" SolGold " or the " Company ")
Company Update
The Board of Directors of SolGold (LSE & TSX: SOLG) is
pleased to provide an update regarding the Company's activities and
ongoing initiatives following the merger with Cornerstone Capital
Resources Inc. ("Cornerstone") consolidating 100% of the
world-class Cascabel Project.
Key Milestones & Initiatives
ü Strategic Review Progressing - Focused on Value
Maximization
- Discussions ongoing with highly credible groups at different stages of their review
- Over 20 active CAs in place with over 5 site visits already conducted
ü Secured Funding to Ensure Strong Balance Sheet
- US$86 million raised through the 2022 royalty investment by
Osisko Gold Royalties Ltd and equity financing, which included
Jiangxi Copper Company Limited
- Work plans funded for FY 2024 - n o additional financing required in the near-term
ü Key Management Alignment with Shareholders
- Scott Caldwell and Chris Stackhouse appointed as CEO and CFO, respectively
- Low annual base salary of US$200,000 for the CEO and CFO;
equity compensation tied to higher share prices to be
"in-the-money" ensuring full alignment with shareholders
- Meaningful personal investments by management in SolGold shares
ü Organizational Optimization
- Nearly 70% reduction in group headcount - 282 in September 2023 vs. 894 in FY 2022
- Significant reduction in spend achieved with a continuous focus on lowering costs
- SolGold CEO Scott Caldwell relocated to Ecuador to lead operations in the country
ü Key Contract Terms for Cascabel Exploitation Agreement with
the Government of Ecuador
- The Exploitation Agreement covers a renewable 33-year period
- Based on a lower corporate income tax rate of 20% (previously
25%) during the project life, sliding scale royalty of 3-8%
depending on the mineral and its price ("EA Royalty")
- Advance royalty payment of US$75 million is deductible against
the EA Royalty and payable in equal instalments over three years
only when the operator starts construction of the concentrator
(i.e., only when major construction of the project is underway)
ü Advancing & De-Risking Cascabel - Select Next Steps
- Development Stage Exploration Permit for Early Works
- Amended Investment Protection Agreement
- Permitting/Environmental and Social Impact Assessment
- Phased Approach internal study being advanced with a revised
pre-feasibility study expected to demonstrate a lower risk path for
Cascabel with reduced capital intensity
Scott Caldwell, SolGold's CEO and President of SolGold Ecuador,
commented:
" Since being appointed to a leadership role at SolGold, we have
made tremendous progress to ensure a strong balance sheet, improve
our operational focus and advance the strategic review. With the
unwavering support of the Board, I have now implemented a hard
reset within the organization, placing accountability to all
stakeholders as a core principle. SolGold is now in its best
position ever and we remain fully committed to ensuring that all
shareholders are rewarded for funding the world-class Cascabel
discovery.
Our top priority is to continue advancing the ongoing strategic
review. Cascabel is undeniably recognized as a significant
strategic asset with a high-quality resource. I firmly believe
Cascabel will one day become a multigenerational mine and a
substantial contributor to the Ecuadorian economy. Consequently,
external groups evaluating the project are being very diligent in
their review as they progress through various stages in their
internal processes. In parallel, we continue to advance and de-risk
Cascabel to position it as a turn-key asset."
Strategic Review Update
The SolGold Board, with its advisors, continues to advance the
previously announced Strategic Review. As previously disclosed, the
Strategic Review includes, among other things, evaluating and
pursuing value-enhancing opportunities for the Company.
The Company is in discussions with a number of highly credible
groups who are at different stages of their review with interest in
Cascabel and/or SolGold's Ecuadorian exploration portfolio. There
are over 20 active confidentiality agreements ("CAs") in place and
over 5 groups have already completed site visits with a number of
follow-up visits being scheduled. It is very clear through this
review that Cascabel is recognized as a world-class asset of
significance, with parties being very diligent in their review
given the size and potential scale of the asset.
No Near-Term Funding Required
The Company is expected to be well funded for FY 2024 work plans
due to optimization efforts implemented to date to focus spending
on core activities utilizing the funding secured in 2022.
While no additional funding is required at this time, there has
been interest in the block of SolGold shares acquired indirectly
through the Cornerstone transaction (the "Subsidiary Shares").
There is no need to place the Subsidiary Shares at this time, and
depending on the outcomes of the Strategic Review, there may be no
need to place the Subsidiary Shares in the future. At the
appropriate time, a determination will be made regarding the future
of the Subsidiary Shares.
Recent Trading
As part of our ongoing shareholder engagement efforts, we have
had numerous discussions with institutional and retail
shareholders. Most of our shareholders are long-term investors with
only a small percentage actively trading. Over the past six months,
the average daily traded volume was only 0.1% of the SolGold shares
outstanding. To put this in perspective, on average, it would take
over 10 full trading days to trade only 1% of SolGold shares
(assuming the same shares are not being recycled). Given our
shareholder concentration impacting the illiquidity of our shares,
an immaterial amount of shares traded has a relatively material
impact on our share price. Similar to last year when an institution
sold down its position and impacted the share price for over 6
months, in the past months another institution is understood to be
liquidating their market positions which includes SolGold.
Outlined below are the holdings of our major shareholders and
CEO:
Reported Holdings (Over 3%) & CEO Number of Shares % of Outstanding Shares
BHP Billiton Holdings Limited 310,965,736 10%
Newcrest Mining Limited 309,309,996 10%
DGR Global Ltd 204,151,800 7%
Jiangxi Copper Company Limited 180,753,608 6%
Cornerstone / SolGold Canada Inc. 157,141,000 5%
Maxit Capital LP / D. Bob Sangha 153,366,663 5%
Tenstar Trading Limited 121,002,393 4%
Nicholas Mather (Director) 89,746,710 3%
Scott Caldwell (CEO) 19,407,244 1%
Total 1,545,845,150 51%
----------------------------------- ----------------- ------------------------
Mr. Caldwell also commented:
"As a dedicated long-term shareholder since 2016, I too am
disappointed in our current share price even though the Company is
currently in the strongest position it has ever been. It is
important to note that the immaterial level of trading activity in
our shares that has corresponded with a decline in our share price
does not reflect the intrinsic value of our underlying assets. I
firmly believe the fundamental value of our shares far exceeds
their current market price, and I am fully committed, alongside the
SolGold team, to ensuring a successful outcome."
This announcement was approved for release by Scott Caldwell -
CEO.
CONTACTS
Scott Caldwell
SolGold Plc (CEO) Tel: +44 (0) 20 3807 6996
Tavistock (Media)
Jos Simson/Gareth Tredway Tel: +44 (0) 20 7920 3150
ABOUT SOLGOLD
SolGold is a leading resources company focused on the discovery,
definition and development of world-class copper and gold deposits
and continues to strive to deliver objectives efficiently and in
the interests of shareholders.
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 is listed on the London Stock Exchange and Toronto Stock
Exchange (LSE/TSX: SOLG).
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, including the plan for
developing the Project currently being studied as well as the
expectations of the Company as to the forward price of copper. 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".
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.sedar.com .
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.
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