25th Feb 2014 10:25
LONDON (Alliance News) - SolGold PLC Tuesday said it has taken 85% ownership of the Cascabel copper-gold porphyry project in northern Ecuador after recent drill results confirmed the potential of the project, but it also had to halt the latest drilling prematurely as the rig hit the limit of its capabilities in difficult ground conditions.
SolGold has reported a string of good drill results from the project in recent months and Tuesday said it had agreed overnight with partner Cornerstone Capital Resources Inc to take an 85% stake in the Ecuadorean registered company that owns the Cascabel project, up from 50% previously.
It has paid Cornerstone Capital Resources CAD250,000 for Cornerstone shares and will allot Cornerstone CAD100,000 worth of SolGold shares as payment for the deal. After the transaction, SolGold will have a 13% stake, currently worth about USD2.6 million, in Cornerstone. Including payments to Cornerstone, SolGold will have spent about USD6.3 million on the Cascabel project.
"We have concluded that this project offers us the opportunity to discover a world class copper-gold porphyry. The value precedents are compelling and we are armed with great support from an outstanding exploration and management team, and very supportive shareholders," SolGold Chief Executive Alan Martin said in a statement.
Meanwhile, SolGold said it has had to halt drilling on the fifth hole at the Alpala prospect at Cascabel because the drill rig couldn't go any further in difficult ground conditions. Last week, the company had said it wanted to drill down to 1,500 metres after finding strong porphyry copper sulphide mineralisation down to 1,303.5 metres in the fifth hole.
It currently has assay results down to 869.68 meters from the hole and expects the results from assays down to 1,194 metres within a week. It has now sent off the samples down to 1,330 metres and hopes to get the results within 10 days.
SolGold shares were up 3% at 12.61 pence Tuesday morning, the highest level for nearly four months.
By Steve McGrath; [email protected]; @stevemcgrath1
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