Cascabel Project pre-feasibility study reveals over $1bn savings for SolGold

SolGold (LSE & TSX: SOLG) has announced the completion of a comprehensive Pre-Feasibility Study (PFS) for its flagship Cascabel Project in Ecuador, showcasing a promising future with substantial initial capital expenditure savings of over $1 billion compared to prior estimates. Prepared in accordance with National Instrument 43-101 (NI 43-101), the study affirms the economic viability of developing the Cascabel site through a Phased Block Cave Mining approach.

The PFS highlights the economic and technical benefits of adopting a phased approach to the development of the Cascabel mine, significantly reducing initial capital expenditure by more than $1 billion and lowering technical risks. This strategic planning allows for an accelerated cash flow and project development timeline, promising a more efficient route to profitability.

With an estimated mine life of 28 years, Cascabel is poised to exploit only 18% of the Alpala measured and indicated mineral resource, underscoring the project’s potential as a long-term mining asset. SolGold’s commitment to responsible mining practices is evident in its approach to minimizing environmental impact, utilizing renewable energy sources, and engaging with local communities to ensure sustainable operations.

The study projects a pre-tax Net Present Value (NPV8%) of $5.4 billion with a 33% internal rate of return (IRR), and an after-tax NPV8% of $3.2 billion at a 24% IRR. This financial performance is supported by an anticipated average annual free cash flow of $449 million in the first five years, with total free cash flow generation reaching $7.1 billion over the first decade.

SolGold’s phased development strategy for Cascabel involves an initial production rate of 12 million tonnes per annum (Mtpa), scaling up to 24 Mtpa in year 6, fully funded by project cash flow. This approach not only reduces upfront costs but also allows for a gradual expansion of mining operations and infrastructure, aligning with the company’s sustainability goals.

The Cascabel Project represents a significant step forward in responsible and sustainable mining practices. By focusing on phased development, renewable energy integration, and community engagement, SolGold is setting new standards in the industry. The project’s reduced capital expenditure and lower risk profile, combined with its substantial economic benefits, position Cascabel as a key player in Ecuador’s mining future and a model for future projects worldwide.

The Cascabel Project’s PFS underscores SolGold’s vision for a future where mining operations are not only economically viable but also environmentally responsible and socially engaged. With its phased approach and commitment to sustainability, Cascabel is set to become a benchmark for mining projects worldwide.