25th Nov 2019 09:55
(Alliance News) - BHP Group PLC's is to become SolGold PLC's biggest shareholder, SolGold said Monday, after taking a further interest in the miner.
SolGold's flagship asset is the Alpala deposit on the Cascabel project in Ecuador, with a pre-feasibility study due to be completed by the end of the first quarter of 2020.
BHP has signed up for a further 77 million SolGold shares at 22.15 pence each, meaning a total investment of approximately GBP17.1 million. BHP will hold 282.7 million SolGold shares after the deal, making it marginally the biggest shareholder with a 14.7% stake.
SolGold shares were 12% higher on Monday morning in London at 22.00p, just over half of where they were in March.
BHP also has been issued with 19.3 million share options exercisable at 37p within five years.
Just over a year ago, BHP invested GBP45 million into SolGold, taking 100 million shares at 45p. A month prior to that, it had bought 103.1 million shares at 25.592p.
The recent share purchases follow an unsuccessful attempt in late 2016 by BHP to buy a 10% stake in SolGold for USD30 million. BHP also had looked to take a 70% direct interest in the Cascabel project for a further USD275 million, but this was rejected by SolGold.
"SolGold is pleased to welcome BHP into a further position in the company. SolGold's view is that the agreement endorses its view of SolGold's commanding Ecuadorean copper and gold exploration footprint, and in particular the robust Alpala deposit," said SolGold Chief Executive Nick Mather on Monday.
As well as BHP, SolGold also has as a major shareholder in Australia's Newcrest Mining Ltd.
By George Collard; [email protected]
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