Jiangxi Copper has raised its stake in SolGold to 12.19%, becoming its largest shareholder. This move allows Jiangxi to exert more influence over the development of the Cascabel copper mine in Ecuador, which is a significant undeveloped deposit. The deal involves an investment of USD 18 million, with Jiangxi aiming to provide further development consultancy for Cascabel.
Jiangxi Copper has announced a significant increase in its investment in SolGold, aiming to secure the position of the largest shareholder. With this acquisition, Jiangxi Copper will gain greater influence in developing SolGold’s flagship asset, the Cascabel copper mine in Ecuador, recognized as one of the most significant undeveloped copper-gold deposits globally.
The Nanchang-based firm stated it would invest USD 18 million to acquire an additional 5.2 percent equity in SolGold, equivalent to 157,141,000 shares, as detailed in the recent asset purchase agreement. Following this transaction, Jiangxi Copper’s total ownership in SolGold will rise to 12.19 percent, establishing it as the principal shareholder among the company’s investors in Perth, where SolGold is listed.
Currently, SolGold is not operational and has failed to generate revenue, reporting a net loss of USD 60.3 million for the fiscal year ending June 30, 2024, and USD 17.4 million in losses during the first six months of the subsequent fiscal year. Despite these financial struggles, the company controls the important Cascabel copper mine and other mineral projects at various exploration phases.
As acknowledged in a recent pre-feasibility study, the Cascabel mine boasts considerable resources, including 12.2 million tons of copper and substantial quantities of gold and silver, with proven reserves accounting for 3.2 million tons of copper. The acquisition will not only fortify Jiangxi Copper’s resource holdings but also enhance its standing within the industry, with plans to offer consultancy for further advancement of the Cascabel project following the deal.
In market news, Jiangxi Copper’s shares in Hong Kong [HKG: 0358] climbed 0.3 percent to HKD 13.46 (USD 1.73), while in Shanghai [SHA: 600362], shares closed at CNY 22 (USD 3), also reflecting a 0.3 percent increase.
Jiangxi Copper’s decision to elevate its stake in SolGold to become the largest shareholder underscores its strategic commitment to the promising Cascabel copper mine. With substantial resources reported, this investment is poised to strengthen Jiangxi Copper’s influence and resource portfolio, despite SolGold’s current operational challenges. The collaboration promises to drive development efforts at Cascabel, paving the way for future growth in the copper and gold sectors.
Original Source: www.yicaiglobal.com
