BHP becomes largest shareholder in Ecuador-focused Solgold
BHP will become the largest shareholder in Ecuador-focused mining company Solgold, with approximately 14.7 per cent of the firm’s share capital.
The Anglo-Australian company will raise its stake from 11 per cent by purchasing 77m new shares for $21.9m (£17.1m) for 22.2p.
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Shares in Toronto and London-listed Solgold were up nearly 12 per cent on the back of the announcement this morning.
Australian gold miner Newcrest Mining was, until now, Solgold’s largest shareholder, according to Refinitiv data.
Commenting on the agreement, Solgold chief executive Nicholas Mather said:
“Solgold is pleased to welcome BHP into a further position in the Company. Solgold’s view is that the agreement endorses its view of Solgold’s commanding Ecuadorean copper and gold exploration footprint, and in particular the robust Alpala deposit.”
Under the terms of the new share subscription agreement, BHP will also receive options over 19.3m Solgold shares which are exercisable until November 2024 at a price of 37p per share.
Solgold is the largest and most active concession holder in Ecuador and is aggressively exploring the length and breadth of the gold-rich section of the Andean copper belt.
The company wholly owns four other subsidiaries active throughout the country, focused on thirteen high priority gold and copper resource targets.
The Alpala deposit is the main target in the Cascabel concession, located on the northern section of the heavily endowed Andean Copper Belt, which is renowned as the base for nearly half of the world’s copper production.
In October SolGold have raised their outlook for the mine after metallurgical testing showed a potential extra $8.7bn (£6.8bn) in revenues over its life.
The Primary Economic Assessment initially indicated total revenues of $74bn over its life.
Read more: Solgold set to soar as flagship copper mine strikes gold
Analysts from Liberum said: “Ecuador also remains one of the most prospective mining jurisdictions globally and assays from the Blanca gold prospect could confirm a new commercial discovery just to the north of Alpala.”
Earlier this month BHP appointed Mike Henry as the group’s new chief executive. He will replace outgoing chief executive Andrew MacKenzie in January.