Transcription of Finance News Network Interview with SolGold PLC (LON:SOLG) CEO, Nick MatherCarolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from explorer and future developer, SolGold PLC (LON:SOLG) is CEO, Nick Mather. Nick, welcome to FNN.
Nick Mather: Thank you very much Carolyn.
Carolyn Herbert: Can you start by giving us an introduction to the company, your strategy and your key projects?
Nick Mather: SolGold is a named London Stock Exchange listed company. We have a market capitalisation of about £250 million, the share price is 20p as of last night, it’s very liquid. We turn over on average 14 million shares a night. And the company has one of the world’s best copper/gold porphyry discoveries in Northern Ecuador, on the gold rich northern end of the Andean copper belt.
Carolyn Herbert: Now to your Cascabel project in more detail. Where is it located and what does it contain?
Nick Mather: It’s in Northern Ecuador about four hours drive north of the capital Quito, and only 1.5 hours from the Pacific port of San Lorenzo and Esmeraldas. It’s got 14 different targets that we defined over the 50 square kilometre tenement area. In 3.5 years we’ve spent $35 million, found 14 targets, drilled just one of those Carolyn and that’s taken 23,700 metres of drilling over 18 holes, of which 16 have hit the ore body. And four have delivered world-class intersections, over a kilometre in length at economic copper and gold grades.
Carolyn Herbert: What’s been taking place at Cascabel that’s generated such excitement?
Nick Mather: We’ve had two drilling rigs working there last year and we keep hitting these long intersections of consistent porphyry copper/gold mineralisation. Around about 0.7 grams gold and 0.7 per cent copper, but up to four per cent copper and eight grams gold and the very high-grade cores. And it’s those high-grade cores that provide our company with the opportunity to look at developments, with low capital expenditures, low mining rates but are very profitable. And it enables us to develop the project in a step like fashion, without the need to resort to value depletive joint ventures with majors.
Carolyn Herbert: You’ve recently announced a US$33 million capital raising to advance Cascabel. Where will the funds be going and are you fully funded for FY17?
Nick Mather: We’re fully funded for the rest of calendar 16, all of FY17, the rest of calendar 17 and the first half of calendar 18. As a result of that, we’ll be drilling about 46,000 metres of drilling. We’ll get up to six or seven drilling rigs onto the property and it’ll grow from there.
Carolyn Herbert: Who participated and what were the terms of the raise?
Nick Mather: The lead financier is a very impressive firm of Toronto based investment bankers, headed up by Bob Sangha, Maxit Capital. And Maxit understands the value proposition in this company. So the first raising that he did was $16.5 million, we contributed $6 million to it as well. That was at double the share price, which was 3p at the time; we raised the money at 6p. And then tranche two, that Newcrest Mining Limited
(ASX:NCM) and Maxit are doing, is the US$33 million that you’re talking about. And that’s been done at US16 cents or 12p per share, unless something else more spectacular comes along.
Carolyn Herbert: What attracted Newcrest to the register and will they be providing any technical expertise?
Nick Mather: The attraction for Newcrest is that the discovery that we have at Alpala, which is the prospect that we have drilled; one of the 14 targets that we’ve outlined is very similar in all of its characters, to the Golpu project that Newcrest has in Papua New Guinea. And they’ve recently published a $1.1 billion net present value assessment on. So they see a lot of similarities between Golpu and Alpala, but they’re more attracted to the fact that this is a cluster of targets. There’re potentially 14 different porphyries that may yield ore bodies.
Carolyn Herbert: What about the offer from BHP Billiton Limited
(ASX:BHP)?
Nick Mather: BHP just wanted to take the project off us pretty much in a 70 per cent earn-in. They did offer $30 million at 22 cents a share. We think that there’s a lot more value in this project, and we want to make sure that we retain the value for our shareholders in SolGold. We’ve unravelled the geological problems at Cascabel and we can see a lot of upside that can be applied to those 13 other targets.
Carolyn Herbert: Finally Nick. Where would you like to see SolGold 12 months from now and what’s your long-term ambition for the company?
Nick Mather: Long-term ambition for the company Carolyn is to see it go into development in Ecuador. We’re developing a strong and consultative relationship with the Ecuadorian Government. And they’re showing very strong trend towards understanding the mining industry and helping it develop. So we think Ecuador’s a good place to develop a mine. There’s certainly good capital and operating cost advantages there, in terms of the locational advantages and low cost of labour and electricity.
So using those features and the high-grade core aspects of the Alpala project, we’re aiming to take this company through to development. And there’s a lot of other targets there that we can also take the project along.
Carolyn Herbert: Nick Mather, thanks for the update of SolGold.
Nick Mather: Thank you very much Carolyn.
Ends
