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Solgold to cooperate with 4th-biggest shareholder on Ecuador copper project

LONDON, June 2 (Reuters) - BHP-backed SolGold Plc, the copper-gold company focused on Ecuador, said on Wednesday it will work with shareholder Cornerstone Capital Resources to advance the Cascabel project, ending a two-year spat that will allow them to explore financing options.

The Cascabel-Alpala asset in Ecuador is a copper-gold project expected to start production in 2025. It has measured and indicated resources of 10 million tonnes of copper and more than 20 million ounces of gold.

“The parties will explore and evaluate a range of strategic and financing options focused on maximizing value for their respective shareholders with respect to the Cascabel Project,” it said in a release.

Cornerstone has a 6.9% stake in SolGold, making it the $1.1 billion company’s fourth-biggest shareholder after BHP , Australia’s Newcrest and DGR Global Ltd.

Canada’s Cornerstone, which has also a 15% in the Cascabel concession’s holding company ENSA, had twice rejected a takeover offer from London-listed Solgold, in turn urging SolGold’s shareholders to replace the board.

SolGold was also at the centre of a public dispute with BHP and Newcrest last year, which raised concerns that its funding methods for the project were inefficient and expensive, after it secured a financing package of up to $150 million and a $15 million bridge loan with mining financiers Franco-Nevada Corp .

It has since sought to mend fences with its major shareholders. Its founder and chief executive Nick Mather retired in March after 13 years at the helm.

“Everybody with an interest in Cascabel is now demostrating a united front, which is ultimately good for the project,” interim CEO Keith Marshall told Reuters.

Both BHP and Newcrest participated in Solgold’s latest $73.8 million fundraising in April.

Copper is in high demand for use in renewable energy and electric vehicles and new deposits are rare and increasingly difficult to recover. Gold serves as an hedge against inflation, stoked by policy support measures in advanced economies in response to the COVID-19 pandemic. (Reporting by Clara Denina Editing by Marguerita Choy)

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