SolGold to merge with Cornerstone for full ownership of Cascabel project

SolGold has signed an agreement with Cornerstone Capital Resources to gain 100% ownership in the Cascabel copper and gold project in Imbabura province, northwest Ecuador.

Under the terms of the agreement, SolGold, which is an Australia-based copper and gold exploration company, will acquire all of the issued and outstanding shares of Cornerstone Capital Resources, other than those already held by it.

The transaction includes the exchange of Cornerstone Capital Resources Shares for 15 SolGold ordinary shares for each Cornerstone Capital Resources common share held. Cornerstone Capital Resources is a Canada-based mineral exploration company.

SolGold has been given an option to pay up to 20% of the consideration in cash, as per the terms of the agreement.

The combined group is expected to hold a robust portfolio of other projects primarily across Ecuador.

SolGold to merge with Cornerstone Capital Resources for full ownership of Cascabel project. Photo courtesy of SolGold plc.

Commenting on the SolGold merger with Cornerstone, Darryl Cuzzubbo — SolGold CEO and Managing Director said: “It has been my view from the start that SolGold and Cornerstone are more valuable together than apart. This is an exciting value enhancing transaction for all stakeholders. This Transaction also sets the stage for a strategic review of the Combined Group as we methodically assess options that are in the best interest of our shareholders.”

SolGold has also initiated a strategic review process to evaluate financing alternatives for the combined entity, and spin-out assets, other than the Cascabel Project, to all shareholders of the combined group.

Citi is serving as financial advisor to SolGold in connection with the transaction, while Bennett Jones is acting as its legal advisor.

Brooke Macdonald — Cornerstone Capital Resources President and CEO said: “This merger transaction makes sense for both sets of shareholders. The merger allows our shareholders to maintain exposure to the world class Cascabel Project and is a step towards maximizing value.

“Having considered the landscape, we are convinced that combining forces with SolGold will unlock significant value for all shareholders. The strategic review for the combined group aligns with our views on the best path forward. Today represents a significant milestone for all Cornerstone stakeholders and I would like to thank them for their support over the years.”