SolGold seeks support from Cornerstone's shareholders in bid for Ecuador project

SolGold seeks support from Cornerstone’s shareholders in bid for Ecuador project

Cecilia Jamasmie | February 8, 2019 | 9:29 am Base Metals Precious Metals Canada Latin America Copper Gold

After takeover rejection, SolGold goes to Cornerstone’s shareholders in bid to grab Ecuador project

The Cascabel project, 180 km north of Quito in Ecuador, may become one of the largest copper-gold porphyry systems ever discovered. (Image: Screenshot from )

Ecuador-focused explorer SolGold (LON, TSX:SOLG) it was “surprised and disappointed” at how quickly Cornerstone Capital Resources (TSX-V:CGP) dismissed a takeover approach, adding that it will bring the offer directly to the target’s shareholders.

Last month, SolGold put forward what it called of the Cascabel copper-gold project in exchange for shares. Less than three hours later, the Canadian firm .

“Was there time that early in the morning to actually make contact with the shareholders representing more than 50% of those outstanding? Did Cornerstone have time to hold a board meeting to consider the offer between the time board members woke up in the morning and the time the press release was issued?” SolGold questioned .

It took Cornerstone less than three hours to dismiss SolGold’s offer for the 15% stake in the coveted Cascabel copper-gold project.

The company believes consolidating the ownership of Cascabel into one company makes “eminent” sense, and it said it has attempted to do this with Cornerstone in both 2017 and 2018.

SolGold noted it believed all Cornerstone shareholders should be given the opportunity to make an informed decision, and that an independent review should be conducted by the company’s board.

Ontario-based Cornerstone handed SolGold an initial 20% of Cascabel, one of the few new copper-bearing projects expected to come online in the near future, with an earn-in option over four years in 2012.

The asset now has a mineral resource of 2.95 billion tonnes at 0.52% copper, with $117 million spent on exploration.

Cascabel’s appeal

Cascabel has attracted quite a few major miners and boosted SolGold’s position in the global market.

Australia’s largest gold producer, Newcrest Mining (ASX: NCM), in December to 15.33% from 13.83%, to secure a portion of Cascabel.

SolGold believes consolidating the ownership of Cascabel into one company makes “eminent” sense.

The move further boosted Newcrest’s position in SolGold against No.2 shareholder, BHP, which in September had in the explorer.

Ecuador has gained ground as a mining investment destination in the past two years, thanks to a revised regulatory framework and a .

Almost a year ago, Newcrest Mining , which expects to in southeastern Ecuador into production by the end of 2019.

Anglo American (LON:AAL) also landed in the South American country last year. Through a deal with Canada’s Luminex Resources (TSX-V: LR), it plans to develop two copper and gold concessions there.

Currently, the nation’s emerging mining sector employs 3,700 people, but estimates the figure will rise to about 16,000 by 2020.

SolGold has a 100% interest in 12 copper-gold targets in Ecuador, which it says is under-explored compared to Chile, the world’s top copper producer. The company also has assets in the Solomon Islands and Australia.