SolGold’s wholly owned Ecuadorian subsidiary Exploraciones Novomining has agreed upon a term sheet with the Government of Ecuador for the execution of the exploitation agreement for the Cascabel copper-gold project.
SolGold has been in discussions with the government since January 2023 to negotiate the terms and conditions of the exploitation agreement following the discovery of the Alpala and Tandayama America deposits on the Cascabel Concession.
SolGold said the exploitation agreement, together with existing legislation and regulations, establishes the terms and conditions needed for the project development.
The Ecuadorian Government has approved the term sheet, which features various investor protection rights that ensure investment protection, including a dispute resolution process via international arbitration.
SolGold noted that Exploraciones Novomining has negotiated the right to develop the Cascabel Project and allow the production of copper, gold and silver from the contract area for a period of 33 years, with an option for future renewal.
The company has also agreed with the government to an advance royalty payment totalling $75m, to be paid in trenches.
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SolGold said: “The term sheet also includes a mechanism for correcting any economic imbalance for the mining concessionaire [Exploraciones Novomining] as a result of changes in taxes, laws and regulations in place at the date of the signing of this agreement.
“The provision removes a significant amount of uncertainty for the economic regime governing the project in the future.”
According to the term sheet, Exploraciones Novomining will also be responsible for making decisions related to the project’s design, construction and operation.
Recently, SolGold secured a 25-year term renewal for the concession of the Cascabel project until 2048.
Located in north-western Ecuador near the Andean Copper Belt, the project is scheduled to start production in mid-2029.