SolGold secures US$750mn financing for Cascabel project in Ecuador

Australian company SolGold secured financing of US$750 million for its planned US$4.2 billion Cascabel gold and copper mine in Ecuador, which will be used to prepare the final feasibility study and begin infrastructure work to pave the way for construction.

The financing comes from Franco-Nevada (70%) and Osisko (30%), in exchange for a percentage of the gold production from Cascabel, through a “syndicated gold stream agreement.”

"This financing not only secures a significant portion of the capital necessary for the construction of Cascabel, but also validates the enormous potential of the project," Scott Caldwell, president and CEO of SolGold, said in a statement.

Of the amount secured, US$100mn will be allocated to risk mitigation, permitting permits and completing the project's feasibility study.

The remaining US$650mn will go towards the start of construction of key infrastructure.

The mine is planned to be built in stages and the first stage is expected to require an investment of around US$1.5bn.

The announcement on the financing comes after the company signed the contract for the exploitation and development of Cascabel with the energy and mines ministry on June 5.

Construction of the mine is projected to begin in 2026, company CEO Scott Caldwell said in an interview with BNamericas in March.

The economic model under which the contract with the Ecuadoran government was negotiated outlines a mine life of 28 years, which the vice president of SolGold Ecuador, Luis Mario Sánchez, says would be equivalent to only 18% of the asset's total resources.

Cascabel is expected to produce 2.9Mt of copper, 6.9Moz of gold and 22Moz of silver during that 28-year period.

SolGold expects the project to become one of the 20 most important copper and gold mines in the world, with advantages in infrastructure and services that other assets in the region do not have.