Jiangxi Copper Expands Stake in SolGold for Greater Influence in Ecuador
Jiangxi Copper is boosting its stake in SolGold to secure major shareholder status, enhancing its influence over the Cascabel copper mine in Ecuador. The company will invest USD 18 million for a 5.2 percent equity increase, totaling 12.19 percent ownership. Despite SolGold’s financial losses, the acquisition strengthens Jiangxi’s resource position and is expected to aid further development at Cascabel.
Jiangxi Copper is set to increase its stake in SolGold, aiming to become the largest shareholder. This strategic move will provide the Chinese copper entity heightened influence over the development of SolGold’s principal asset, the Cascabel copper mine in Ecuador, renowned for being one of the largest undeveloped copper-gold deposits globally.
To facilitate this acquisition, Jiangxi Copper will invest USD 18 million for an additional 5.2 percent equity, amounting to 157,141,000 shares of SolGold. This transaction will elevate Jiangxi’s total ownership to 12.19 percent, securing its position as the most significant shareholder in Perth-based SolGold, which is publicly traded in both London and Toronto.
Currently, SolGold is not operational and is generating no revenue. The firm reported a net loss of USD 60.3 million for the fiscal year ending June 30, 2024, and an additional loss of USD 17.4 million over the first half of the new fiscal year.
Despite its financial constraints, SolGold possesses valuable mineral resources, particularly the Cascabel copper mine, and various other projects at different stages of exploration. The mine alone has confirmed resources of 12.2 million tons of copper and substantial quantities of gold and silver, as indicated by a recent pre-feasibility study.
The acquisition is expected to enhance Jiangxi Copper’s resource reserves and strengthen its industry position. With this deal, Jiangxi Copper will also extend consulting services to aid in the Cascabel project’s development, marking a crucial step in its growth trajectory.
On the financial markets, Jiangxi Copper’s Hong Kong shares closed up 0.3 percent at HKD 13.46 (USD 1.73), with similar performance observed in its Shanghai listings.
Jiangxi Copper’s decision to increase its shareholding in SolGold highlights its strategic efforts to secure influential control over the significant Cascabel copper mine in Ecuador. Despite SolGold’s current operational challenges and financial setbacks, this acquisition will enhance Jiangxi’s resource reserves and position within the mining industry, thereby facilitating future growth and development in the sector.
Original Source: www.yicaiglobal.com
