July 15, 2024 (Globalinvestorideas.com Newswire) Globalinvestorideas.com, a go-to platform for big investing ideas, reports on trading for SolGold (LSE:SOLG) (TSX:SOLG), a leading resources company focused on the discovery, definition, and development of world-class copper and gold deposits.
SolGold made the TSX top percentage gainer list on news on funding news today, trading at $0.1850, gaining $0.0350, up 23.33% on volume of over 1.3 Million shares.
SolGold announced that it has entered into a syndicated gold stream agreement with Franco-Nevada (Barbados) Corporation (“Franco-Nevada”) and Osisko Bermuda Limited (“Osisko”) (together, the “Syndicate”) for the provision of US$750 million in project advancement funding and a proportion of development funding (“Deposit”) in exchange for a percentage of the gold produced from the Cascabel Project .
The Deposit comprises two funding segments, of which Franco-Nevada and Osisko will contribute 70% and 30%, respectively:
i) the initial deposit (“Initial Deposit”): US$100 million paid over three tranches, a third of which is expected to be received later today, allocated towards de-risking, permitting, completion of the development funding package and completion of the feasibility study (“FS”) on the Project to take it to a Final Development Investment Decision, and
ii) the construction deposit (“Construction Deposit”) of US$650 million to be contributed to funding the construction of the Project.
In exchange for the Deposit and ongoing payments to SolGold equivalent to 20% of the spot gold price at the time, the Syndicate will receive an amount in reference to 20% of the recovered gold in concentrate from Cascabel until 750,000 ounces of gold have been provided after which the percentage will reduce to 12% for the life of the mine. At a time when global demand for copper is expected to surge, the Agreement, which involves gold only, preserves the revenue streams from the significant copper, silver, and a large portion of the gold resources at Cascabel for SolGold and its shareholders while also fulfilling SolGold’s commitment to royalty holders, the Ecuadorian Government, and stakeholders to advance the Project.
The Agreement includes a buyback option for five years following the closing of the stream transaction, exercisable upon a change of control transaction of SolGold, to reduce the stream by 50% within three years of the closing date of the Agreement or by 33.33% thereafter until the fifth anniversary of the closing date of the Agreement. This buyback option provides SolGold with exceptional strategic flexibility.
Key Highlights
Validates Cascabel’s position as a world-class copper-gold project
Represents a substantial contribution towards the estimated US$1.55 billion funding required for the construction of Cascabel, per the 2024 NI 43-101 Pre-Feasibility Study (“PFS”) (See News Release of 16 February 2024: Link), while maintaining the first-quartile cost profile
Validates the 2024 PFS that demonstrates an after-tax NPV8 of US$3.2bn and an after-tax IRR of 24% based on a 4-year development period for an initial 12 Mtpa operation ramping up to 24 Mtpa at conservative prices (US$3.85/lb Cu and US$1,750/oz Au)
Competitive cost of capital at ~9% based on the 2024 PFS
Provides sufficient funds to advance the Project to a Final Development Investment Decision, including completion of feasibility studies, any required engineering studies, and financing completion
Enables the completion of the Project’s environmental permitting subject to process and government approval
Flexibility to reduce gold deliveries into the stream upon a change of control via a buyback option
Significant due diligence and financial commitment from Franco-Nevada and Osisko further confirm the extensive work completed by SolGold
Commitment by Franco-Nevada and Osisko to significantly support environmental and community projects, reflecting their dedication to sustainable development and social responsibility
Recent News:
https://ca.finance.yahoo.com/news/solgold-plc-announces-us-750m-060000272.html
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