Canadian miner Solaris Resources has entered a $200m financing arrangement with RGLD Gold, a subsidiary of Royal Gold, to advance its large-scale Warintza copper-gold-molybdenum project in south-eastern Ecuador.
This agreement comprises a gold stream and a net smelter return (NSR) royalty, designed to provide long-term liquidity for the project.
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The funding will cover all necessary activities up to a final investment decision and repay existing senior secured debt with Orion Mine Finance Management.
Royal Gold will pay the upfront cash consideration of $200m in three tranches, with the first tranche of $100m paid upon closing.
The second tranche of $50m will be paid after publication of the pre-feasibility study (PFS) and the environmental impact assessment technical approval.
The last tranche of $50m will be made available on the first anniversary of the closing date.
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By GlobalDataSolaris president and CEO Matthew Rowlinson said: “This transaction is a clear endorsement of the potential scale, geological qualities and its near surface nature, economics and stage of development of Warintza, one of the few remaining near-term, globally significant copper development opportunities not controlled by a major.
“Further, it is a reflection of the strong investor confidence in Ecuador as a mining jurisdiction, supported by the government’s commitment to the sector as a pillar of long-term economic development. The stream is expected to represent a small percentage of the gold over the life of mine and together with the royalty, enables the company to maintain the project’s strategic flexibility.”
Under the gold stream component, Royal Gold will receive deliveries equivalent to 20oz of gold per one million pounds of copper produced within a specific area of interest.
The purchase price for the gold will be 20% of the spot price until the delivery of the first 90,000oz, and then 60% of the spot price.
Additionally, Royal Gold will secure a 0.3% NSR royalty on all metal production within an expanded area of interest, with provisions for annual increases.
The agreement’s structure allows Solaris to maintain significant exploration upside and commercial flexibility.
In the event of a change of control, provisions are in place for potential termination of the stream and adjustments to the royalty.
Royal Gold has also committed to supporting Solaris’ environmental and social programmes, highlighting a shared commitment to sustainable and responsible mining practices.
Discovered in 2000, the Warintza project is estimated to contain measured and indicated resources of 1,082 million tonnes (mt) at 0.48% copper equivalent (CuEq), while inferred resources are estimated at 3,135mt at 0.27% CuEq.
Solaris anticipates publishing a PFS for the project in the third quarter of 2025, with environmental impact assessment approval expected by mid-2025.
The company is also progressing with more than 82,000m of infill drilling to update its mineral resource estimate in the same time frame.
Royal Gold president and CEO Bill Heissenbuttel said: “Warintza is at an early stage in its development and is one of the only large-scale copper-gold-molybdenum projects that is not controlled by a major mining company, and the creative transaction structure offers Solaris flexibility as they consider strategic alternatives to advance the project while protecting Royal Gold should development not proceed according to current plans.”
In May 2024, Solaris voluntarily terminated its plan to divest a minority stake to Zijin Mining Group, intended to support the expansion of the Warintza project.
