BHP has entered into a share subscription agreement with SolGold Plc, which is the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador. Following completion of the private placement by SolGold, BHP’s interest in SolGold would increase from 6.01 to 11.2%. BHP has agreed to pay a 32% premium to the 20 day volume-weighted average London Stock Exchange price determined on 15 October 2018.

BHP President Minerals Americas, Danny Malchuk said “Ecuador is a highly prospective region for the next generation of copper supply. This additional investment in SolGold strengthens our strategic position in the Cascabel copper exploration project, and is consistent with BHP’s strategy to replenish our copper resource base and grow the business.”

Cascabel is a porphyry copper- gold deposit located in the Imbabura province of northwest Ecuador. It lies just off a main road, a three hour drive north of Ecuador’s capital city, Quito. The climate zone is tropical-savannah and vegetation is tropical forest with a well-developed soil horizon. Topography rises from elevations of 900 m to 2,200 m and the moderate to steep landscape is incised by four large drainage complexes.

Northern Ecuador lies within the under-explored northern section of the richly endowed Andean Copper Belt, which extends from Chile in the south to Colombia in the north and then northwest into Panama. The tenement lies on the margin of the Eocene and Miocene metallogenic belts which are renowned for hosting some of the world’s largest porphyry copper and gold deposits, like the giant La Escondida copper mine in Chile, which is hosted within the same age host rocks as Cascabel.

The project is located within the Cordillera Occidental (or Western Cordillera) of the Ecuadorian Andes. Basement rocks consist of ocean floor basalts and sediments of Cretaceous age. High-level Eocene (and possibly Late-Miocene) batholiths and associated granite, granodiorite and diorite bodies intrude volcanic and sedimentary rocks of Cretaceous to Tertiary age. The regional controls that localise gold and copper mineralisation at Cascabel are intimately related with the three-dimensional interaction of deep seated NE-trending first order (arc-parallel) structures, with NW-trending second order (arc-normal) faults, and NNW-trending thirrd order structures.

Within the Cascabel concession, volcanic and sedimentary rocks are intruded by a number of Quartz diorite, diorite and hornblende diorite stocks and dykes. The SolGold field teams completed 1:500 scale, ‘Anaconda’ style geological mapping over the tenement area and all high priority porphyry target centres have been elevated to drill ready status.

To date SolGold has completed geological mapping, soil sampling, rock saw channel sampling, geochemical and spectral alteration mapping over 25 km2, along with an additional 9 km2 of Induced Polarisation and 14 km2 Magnetotelluric ‘Orion’ surveys over the Alpala cluster and other targets at Aguinaga, Parambas, Tandayama-America, Moran and Chinambicito. This exploration activity has identified 15 potential porphyry centres at Cascabel, at Alpala Central, Alpala Northwest, Alpala Southeast, Hematite Hill, Alpala East, Alpala West, Alpala South, Moran, Trivinio, Carmen, Cristal, Aguinaga, Tandayama-America, and Parambas.

SolGold published its maiden Mineral Reserve Estimate for Alpala in January 2018.  The MRE is reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (May 2014). The highlights include:

• Estimate across both Indicated and Inferred classifications totals a current 1,080 Mt @ 0.68% CuEq (7.4  Mt CuEq) at 0.3% CuEq cutoff, some 40% of which is in the Indicated category (by tonnage)
• Contained metal content totals a current 5.2 Mt Cu and 12.3 Moz Au, some 45% of which is within the Indicated category (by contained metal)
• Higher grade core has a current 120 Mt @ 1.8% CuEq (2.0 Mt CuEq) at a 1.1% CuEq cutoff, some 60% of which is in the Indicated category (by tonnage)
• A further 100 Mt @ 1.0% CuEq (1.0 Mt CuEq) is added to the high grade core if a 0.9% CuEq cutoff is used, some 50% of which is in the Indicated category (by tonnage).