SolGold plc - CEO, Nick Mather
CEO, Nick Mather
Source: The Northern Miner
  • SolGold (TSX:SOLG) has entered into a financing agreement with Franco-Nevada, to progress the Alpala copper-gold project in Ecuador 
  • The financing is worth approximately C$140.21 million, with the option to increase that amount by another 50 per cent
  • In exchange, Franco-Nevada will receive a 1 per cent net smelter returns agreement, which will increase to 1.5 per cent if the deal’s second tranche occurs
  • Concurrently, the companies have also entered a bridge loan agreement to make approximately $21.03 million immediately available to SolGold
  • SolGold (SOLG) is down 2 per cent, with shares trading for $0.49 and a market cap of $942.4 million

SolGold (TSX:SOLG) has entered into a new financing agreement with the Franco-Nevada Corporation, to progress its Ecuadorian mining projects.

The financing is worth approximately C$140.21 million, with the option to increase that amount by another 50 per cent.

In exchange, Franco-Nevada will receive a 1 per cent net smelter returns agreement. This will increase to 1.5 per cent, if the second tranche of the deal is realised.

Concurrently, the companies have also entered into a bridge loan agreement. This agreement would make approximately $21.03 million immediately available to SolGold.

Both companies have received all requisite corporate approvals to move forward with the deal. However, they must meet a number of conditions once COVID-19 travels bans start to ease in the region.

SolGold will use the loan and financing to continue progressing its flagship Alpala copper-gold project. The money will also fund the remainder of the company’s Cascabel license.

SolGold’s CEO, Nicholas Mather, is pleased with the new source of financing for the project.

“SolGold is immensely excited to further progress Alpala in the run-up to final feasibility and a development decision, and for Franco-Nevada’s endorsement of the Alpala Project.

“The funding generated, plus the option to upscale the royalty or an additional 0.5 per cent net smelter royalty at SolGold’s option, will see the rapid advancement of the Alpala Project,” he said.

On behalf of Franco-Nevada, President and CEO Paul Brink expressed the company’s hopes for the project.

“Alpala is an exceptional orebody and one of the most attractive block cave development projects globally. We welcome the opportunity to provide a gold stream financing as part of the construction financing of the project,” he said.

SolGold (SOLG) is down 2 per cent, with shares trading for $0.49 at 9:49am EDT.

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