Miners exploiting large porphyry deposits mostly produce from open pits. Credit: Geomartin.

BHP Billiton has reached an agreement to buy Guyana Goldfields’ (GGI) 6.1% stake in Australian mining company SolGold for an aggregate consideration of $35.2m.

SolGold is the majority owner and operator of the Cascabel porphyry copper-gold project located in the Imbabura province of northwest Ecuador.

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“Copper is a key exploration focus for BHP as we seek to replenish our resource base and grow this important business.”

Pursuant to the terms of the agreement, BHP will pay 26.592 pence per share for the acquisition of GGI’s entire stake of 103,125,000 shares in SolGold.

BHP CEO Andrew Mackenzie noted that the transaction will give it exposure to a high quality copper exploration project in Ecuador.

Mackenzie said: “Consistent with our positive long-term outlook, copper is a key exploration focus for BHP as we seek to replenish our resource base and grow this important business.”

Guyana Goldfields intends to use the proceeds from the transaction towards debt reduction and general corporate purposes.

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Guyana Goldfields president and CEO Scott Caldwell said: “We are extremely pleased to have entered into this sale agreement with BHP. The sale of our shares in SolGold will significantly strengthen our balance sheet and will leave us well positioned to deliver on our targeted production growth over the near term.”

In January this year, SolGold announced results of the Alpala maiden mineral resource estimate (MRE) at the Cascabel project.

The results pointed to a total estimate of a current 1.08Bt at 0.68% CuEq at 0.3% CuEq cut off, across both Indicated and Inferred classifications.

Australian exploration firm Newcrest Mining owns a 14.54% stake in SolGold.