DGR Global Provides Key Update on SolGold's Cascabel Project Financing
DGR (DGR) Share Update July 2024 Wednesday 17th
DGR Global Announces Significant Update on SolGold Investment
DGR Global Limited (ASX: DGR) has announced a significant update regarding its 6.6% interest in SolGold (LSE/TSX: SOLG), focusing on the $750 million financing package secured for the Cascabel Copper Gold project in Ecuador.
Instant Summary:
- SolGold secures $750 million financing for Cascabel project.
- Financing includes gold stream agreements with Franco-Nevada and Osisko Gold Royalties.
- Funds will accelerate development and de-risking of the Cascabel project.
- DGR Global holds a 6.6% interest in SolGold.
Financing Details
SolGold has successfully secured a $750 million financing package to advance its Cascabel Copper Gold project in Ecuador. This package includes a gold stream agreement with Franco-Nevada and Osisko Gold Royalties, which will provide significant development capital funding.
The financing is structured to include an initial deposit of $100 million to de-risk the project, followed by $650 million for project development upon a positive construction decision. This funding will cover approximately 50% of the pre-construction and construction capital required for the project.
Gold Stream Agreement
The gold stream agreement stipulates that SolGold will deliver 20% of the recovered gold in concentrate from Cascabel until 750,000 ounces of gold are delivered. After this threshold, the delivery percentage will reduce to 12% for the life of the mine. Payments to SolGold will be equivalent to 20% of the spot gold price for each ounce delivered.
Development and De-Risking
The financing will accelerate the development and de-risking of the Cascabel project. Key milestones include the completion of geotechnical drilling, commencement and completion of the feasibility study, submission of all final permit applications, and a positive construction decision. The project is expected to reach these milestones between 2025 and 2028.
Impact on SolGold and DGR Global
This financing package is a significant step forward for SolGold and its stakeholders, including DGR Global, which holds a 6.6% interest in SolGold. The funding will enable SolGold to advance the Cascabel project to construction, enhancing its potential to become a world-class copper-gold producer.
This substantial financing package is likely to have a positive impact on SolGold's stock, as it significantly de-risks the Cascabel project and accelerates its development. For DGR Global, the value of its 6.6% stake in SolGold could increase, benefiting its shareholders. The broader market may view this development as a positive signal for the resource exploration and mining sector.
Investor Reaction:
Analysts and investors have reacted positively to the news, highlighting the importance of securing such a significant financing package in the current market environment. The involvement of reputable partners like Franco-Nevada and Osisko Gold Royalties adds credibility to the project.
Conclusion:
Investors should keep an eye on the progress of the Cascabel project and the milestones outlined in the financing agreement. The successful advancement of this project could lead to significant returns for shareholders of both SolGold and DGR Global. Stay informed and consider the potential long-term benefits of this development.