Photo by: SolGold
Name of the Project
Cascabel copper/gold/silver project.
Location
Northern Ecuador.
Project Owner/s
Exploraciones Novomining, an 85%-owned subsidiary of SolGold.
Project Description
A new prefeasibility study (PFS) has determined that, over an initial 28-year mine life, Cascabel could produce 4.3-million tonnes of copper equivalent comprising 2.9-million tonnes of copper, 6.9-million ounces of gold and 18.4-million ounces of silver.
At peak production, the mine will yield 216 000 t/y of copper, 734 000 oz/y of gold and 1.16-million ounces of silver a year.
Block cave mining will be used at the project.
Following a ramp-up period of about two years, the initial cave will achieve a production rate of 12-million tonnes a year. The cave will extract high-grade ore, averaging 1.5% copper equivalent for the first ten years of operation.
The mining operations will be expanded by an additional 12-million tonnes a year, increasing to a total production rate of 24-million tonnes in Year 6 of mine production.
Ore from the mine will be transported to the underground primary crushers by load, haul, dump loaders and crushed to -160 mm. The crushed ore will be conveyed directly to the coarse ore stockpile adjacent to the mill at the surface.
Ore will be reclaimed from the coarse ore stockpile and conveyed to a conventional semiautogenous grinding ball mill crusher 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.
Potential Job Creation
Not stated.
Net Present Value/Internal Rate of Return
The new PFS shows the project to have a pretax net present value, at an 8% discount rate, of $5.4-billion and 33% internal rate of return, with a payback of four years.
Capital Expenditure
Preproduction capital is estimated $1.55-billion, a $1-billion saving on the previous PFS.
Planned Start/End Date
Not stated.
Latest Developments
SolGold has signed an exploitation contract for its flagship Cascabel project.
The signing follows successful contractual negotiations and approval of the term sheet by the Ecuador government in July 2023.
The contract establishes the legal and financial terms and conditions required for the development of the copper and gold mine.
The key terms state that government’s share of cumulative discounted benefits derived from the project will be at least 50%. SolGold will make an advance royalty payment totalling $75-million, with the first payment of $25-million due upon the start date of construction.
Once government approves the new Investment Protection Agreement, the company expects a corporate income tax rate of 20% during the project's life. Based on this rate, the mining concessionaire, the State, and SolGold have agreed to a variable royalty on net smelter revenues by Ecuadorian mining law. The royalty on net smelter revenues will follow a variable percentage rate from 3% to 8%, depending on the type of mineral and its price.
SolGold CEO and president Scott Caldwell has said one of the most crucial principles of the contract is that it offers SolGold autonomy and freedom to make its commercial decisions. The technical design of the mine, investment amount, production capacity, besides others, are decisions of the company and respond to its business strategy.
Key Contracts, Suppliers and Consultants
None stated.
Contact Details for Project Information
SolGold, tel +44 20 3823 2130 or email investors@solgold.com.au.