On Wednesday, shares in Ecuador-focused SolGold rose by more than 23% after the company announced a $3.2bn investment from the country’s government in its flagship Cascabel copper-gold project.

According to SolGold, the deal is the largest mining investment in Ecuador’s history, and is separate from the $311m already committed under the Investment Protection Agreement (IPA) for Cascabel. The new deal is known as the Complementary IPA.

The deal was signed at the Prospectors and Developers Association of Canada (PDAC) meeting in Toronto by Ecuador’s Minister of Production, Foreign Trade, Investments and Fisheries, Sonsoles Garcia, and Scott Caldwell, CEO of SolGold.

Caldwell said: “The Complementary Investment Protection Agreement not only reinforces the protections for our key investment in Ecuador but also symbolises a deepening of our relationship with the Ecuadorian State. President Noboa’s attendance and insightful speech at the PDAC convention were warmly welcomed by the mining community and underscores the significant support of his administration for responsible mining in Ecuador.”

In February, SolGold released a new pre-feasibility study (PFS) for Cascabel under which it managed to decrease upfront costs. The previous PFS submitted in April estimated the cost of the project to be $2.75bn, but the first process plant module, pre-production capital used for initial mine development and infrastructure alone is now estimated to cost $1.55bn.

SolGold hopes its vast size will make Cascabel a multi-generational mining asset and potentially one of the largest copper-gold mines in South America. Construction is set to start in 2025.

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The Australian mining company’s share price halved over the past year, and it had to cut spending and strategically review its assets to stay above water. Investors fear management will be unable to deliver Cascabel to its full potential given this recent history.

In London on Wednesday afternoon, SolGold’s shares were trading 23.07% higher. Year-to-date the stock is down 18%.