Following its merger with Cornerstone Capital Resources Inc., SolGold, a renowned copper and gold resources company, now fully controls the Cascabel Project. The company has been engaged in strategic reviews with more than 20 groups, out of which five have completed site visits. SolGold has secured US$86 million through equity financing and a royalty investment by Osisko Gold Royalties (NYSE:OR) Ltd and Jiangxi Copper Company Limited.
The company's CEO Scott Caldwell and CFO Chris Stackhouse have their compensation tied to higher share prices to align with shareholders' interests. In addition, both executives have made personal investments in SolGold shares. As part of an organizational optimization strategy, SolGold has significantly reduced group headcount and operating costs. The headcount has been cut by nearly 70% from 894 in FY 2022 to 282 as of September 2023.
A key contract, the Cascabel exploitation agreement with the Ecuadorian government, has been secured for a renewable 33-year period with favorable terms such as a lower corporate income tax rate of 20% throughout the project life and a sliding scale royalty of 3-8% based on the mineral and its price.
Caldwell highlighted Cascabel's strategic importance, predicting it will become a significant contributor to Ecuador's economy. SolGold is de-risking Cascabel by securing an exploration permit for early works, amending the investment protection agreement, and conducting an environmental and social impact assessment. A revised pre-feasibility study is underway to demonstrate a lower risk path for Cascabel with reduced capital intensity.
Despite experiencing a decline in share price due to low trading activity, Caldwell asserted that the intrinsic value of SolGold's assets significantly exceeds their current market price. He reaffirmed his commitment to ensuring a successful outcome for all stakeholders.
The SolGold Board continues its strategic review to identify value-enhancing opportunities. Over 20 active confidentiality agreements are in place with groups interested in Cascabel or SolGold's Ecuadorian portfolio. The company is well-funded for FY 2024, with no additional funding required at this time. Interest has been shown in the SolGold shares acquired through the Cornerstone transaction.
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