Jiangxi Copper Expands Influence by Increasing Stake in SolGold

Jiangxi Copper is increasing its stake in SolGold to 12.19 percent, becoming the largest shareholder and enhancing its control over the Cascabel copper mine in Ecuador. They will pay USD 18 million for an additional 5.2 percent equity, despite SolGold’s current financial losses. The acquisition is expected to boost Jiangxi’s resource reserves and industry position.

Jiangxi Copper is increasing its ownership in SolGold, aiming to become the largest shareholder and enhance its influence over the development of the Cascabel copper mine in Ecuador. This mine is recognized as one of the largest undeveloped copper-gold deposits globally. The acquisition involves Jiangxi Copper paying USD 18 million to SolGold Canada for an additional 5.2 percent share, amounting to 157,141,000 shares, based on a formal asset purchase agreement made between the two entities.

Upon the completion of this transaction, Jiangxi Copper’s total stake in SolGold will rise to 12.19 percent, solidifying its position as the primary shareholder of the Perth-based company, which is listed in both London and Toronto. Although SolGold currently operates without revenue, having incurred net losses of USD 60.3 million in the fiscal year ending June 30, 2024, and USD 17.4 million in the six months leading up to December 31, 2024, it possesses significant mineral assets.

The Cascabel mine is particularly noteworthy, with a recent pre-feasibility study indicating proven, controlled, and inferred resources of 12.2 million tons of copper, in addition to 30.5 million ounces of gold and 102.3 million ounces of silver. Proven reserves include 3.2 million tons of copper, 9.4 million ounces of gold, and 28 million ounces of silver. Jiangxi Copper anticipates that this acquisition will enhance its resource reserves and overall industry standing, and plans to provide consulting services for the ongoing development of the Cascabel project.

On the day of the announcement, Jiangxi Copper’s stock prices reflected a minor increase, closing up by 0.3 percent at HKD 13.46 in Hong Kong and CNY 22 in Shanghai. This strategic move appears to position Jiangxi Copper favorably within the mining sector as it consolidates control over critical resources.

In summary, Jiangxi Copper’s decision to bolster its stake in SolGold to 12.19 percent signifies a strategic move to enhance its influence over the highly promising Cascabel copper mine in Ecuador. Despite SolGold’s current financial challenges and lack of revenue, the mine’s substantial resource potential positions Jiangxi Copper to benefit significantly from this acquisition. The initiative demonstrates Jiangxi’s commitment to expanding its resource base and its proactive role in the mining industry.

Original Source: www.yicaiglobal.com