Rationalisation of Ecuador Regional Exploration Portfolio
The Board of Directors of SolGold (LSE & TSX code: SOLG) wishes to provide an update on the Company’s Regional Exploration Portfolio in Ecuador. SolGold’s exploration team has recommended to the Board and the Board has approved to rationalise its exploration portfolio to focus resources on the Company’s highest priority targets.
SolGold intends to relinquish 10 of the 72 concessions held within the Company’s four 100% owned subsidiaries in Ecuador largely due to lower assessed geological prospectivity compared to our other project areas. These concessions cover approximately 37,000 hectares in total.
The relinquishment of these concessions will allow our exploration teams to focus on higher priority projects and lower the Company’s exploration commitments, made when SolGold acquired the licences, by circa USD 75.6 million. With a large portfolio in Ecuador, SolGold’s exploration strategy has always been to explore as much ground as possible and relinquish less prospective areas in our search for Tier 1 deposits. With a cash position of approximately USD 109.6 million at 30 June 2021, the group is well funded to advance its regional work programme and able to re-allocate funds. The Company is required to impair these 10 concessions in-line with International Financial Reporting Standards (IAS 36). The impairment charges of USD 3.1 million are immaterial compared to the asset base of the Company and will be disclosed as a subsequent event in the 30 June 2021 yearly accounts to be released shortly.
SolGold continues to pursue its strategy as an integrated explorer and developer and the Company maintains its plan of applying its exploration blueprint of systematic evaluation of its exploration assets across Ecuador. This process will likely involve further consolidation of our project portfolio as a result of SolGold’s ongoing exploration and evaluation activities. Drilling is currently underway at the Cascabel, Porvenir, Sharug and Rio Amarillo projects, and soon to commence at the Cisne Loja project. Field exploration activities continue to focus on Helipuerto, Cisne-Victoria and Chical. The Company also continues to seek strategic partners to advance certain projects with discussions underway with several interested parties.
Keith Marshall, Interim CEO of SolGold commented: “The objective of a rationalised exploration portfolio is to allow our exploration teams to focus on our best targets, while reducing expenditure commitments. Early-stage results from SolGold’s regional exploration programme are encouraging with the discovery of significant near-surface copper-gold mineralisation at the Cacharposa porphyry target at Porvenir as well as the discovery of significant geochemical and geophysical hallmarks of large porphyry systems identified at the Rio Amarillo, Cisne Loja, Sharug and Helipuerto projects.”
Jason Ward, Executive Director - Exploration commented: “We want to focus our attention on the exploration projects where we see the best chance to deliver additional Tier 1 discoveries. Our success to date in Ecuador with discoveries at Alpala, Tandayama and Cacharposa endorses our targeting and field strategy. Importantly, we retain all our high priority projects and have identified additional porphyry targets in close proximity to the Cacharposa ore body within the Porvenir project.’’
By order of the Board