BHP to acquire interest in SolGold for $49.1m

BHP will acquire 6.1 per cent of Brisbane-based company SolGold, owner of the Cascabel copper-gold project in Ecuador.

SolGold’s largest shareholder is Newcrest Mining, which owns about 14.5 per cent of the company.

The company, which is listed on the Toronto Stock Exchange (TSX) and London Stock Exchange (LSE), operates primarily in the north of Ecuador in the Andean copper belt. It also operates some smaller projects in Queensland and the Solomon Islands.

BHP is purchasing about 103.1 million shares in SolGold from Canadian company Guyana Goldfields for an announced price of £27.42 million ($49.1 million), or 26.6 British pence per share, a 20 per cent premium on SolGold’s 20-day volume-weighted average price (VWAP) on the LSE.

Its flagship Cascabel project hosts the maiden Alpala mineral resource, which contains CIM 2014 — the Canadian equivalent of Australia’s JORC — indicated and inferred resources of 1.08 billion tonnes (Bt) at 0.68 per cent copper equivalent, with a contained metal content of 5.2Mt of copper and 12.3Moz of gold.

Commenting on the purchase, BHP chief executive officer Andrew Mackenzie said, “Consistent with our positive long-term outlook, copper is a key exploration focus for BHP as we seek to replenish our resource base and grow this important business.”

Scott Caldwell, president and chief executive officer of Guyana Goldfields said the company was extremely pleased with the deal with BHP.

“The sale of our shares in SolGold will significantly strengthen our balance sheet and will leave us well positioned to deliver on our targeted production growth over the near term,” he said.

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