Newcrest makes significant investment in gold explorer
Summary: Newcrest Mining has invested $US40 million ($52.5 million) in SolGold to help the London-listed gold explorer advance its flagship asset in Ecuador.....
SolGold announced a $US41.23 million raising on the AIM exchange last Friday, which included the investment from Newcrest’s international subsidiary, its second major purchase of shares in the smaller gold company in the past six months.
Newcrest now holds 14.54 per cent of Brisbane-based SolGold, owner of an 85 per cent interest in the Cascabel gold project in Equador.
The placement was at a 15 per cent premium to SolGold’s closing price on Thursday and at a 12 per cent discount to its share price on May 26.
SolGold plans to use the funds for the continued exploration of the Cascabel project, its Ecuadorean exploration strategy and for general working capital.
Newcrest managing director Sandeep Biswas commented: “The Cascabel project, and surrounding region, appear to be prospective and we are pleased to have increased our interest in the region as SolGold continue to increase their drilling activity.”
The company first invested $23-million in SolGold in October 2016 to fund further drilling on the Cascabel project, and to support the company’s Ecuadorian exploration strategy.
SolGold’s chief executive officer Nick Mather said the arrangement with Newcrest, particularly in the area of technical liaison over the past six months since their original investment into SolGold, had been pleasingly smooth.
“The SolGold board and management are encouraged by this further endorsement of the technical merits and management’s commitment to the Cascabel project, SolGold’s exploration strategy across Ecuador and SolGold’s interests generally,” Mather said.