Published: July 19, 2024 |

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SolGold has entered into a syndicated gold stream agreement with Franco-Nevada and Osisko for $750 million in project advancement funding and a proportion of development funding in exchange for a percentage of the gold produced from the Cascabel Project.

The deposit comprises two funding segments, of which Franco-Nevada and Osisko will contribute 70 percent and 30 percent, respectively.

“We are thrilled to finalize this transformative $750 million gold stream with Franco-Nevada and Osisko. This agreement not only secures a significant portion of the capital required to fund the construction of Cascabel but also validates the vast potential of the Cascabel Project,” said Scott Caldwell, president and CEO of SolGold.

“The $100 million dedicated to de-risking and technical work is crucial for the next steps in our project development. We are committed to advancing our operations responsibly and efficiently, and this partnership is a testament to our progress to date and the promising future ahead,” added Caldwell.

“Finally, this major investment in Ecuador reflects the strong support from the Ecuadorian government for the mining industry,” concluded Caldwell.

“We are excited to support SolGold in the development of their world-class Cascabel project. This gold stream agreement aligns with our strategy to invest in high-quality assets with significant growth potential. We believe SolGold’s flagship project will be among the next generation of large copper development projects and will contribute meaningfully to our longer-term growth,” said Paul Brink, president and CEO of Franco-Nevada.

“We are pleased to provide pre-construction funding to derisk project development and project financing that provides a balance of funding certainty and financial flexibility,” added Brink.

“Cascabel represents one of the most significant copper-gold discoveries in recent history. The project has the potential to become a world-class multi-generational mine, demonstrated by the recent PFS estimating at least a 28-year mine life with numerous avenues for additional mine life extensions,” said Jason Attew, president and CEO of Osisko Gold Royalties.

“This new stream investment, which complements Osisko’s existing royalty on the project, will help to support the development of this exceptional asset and enhance Osisko’s long-term growth profile,” added Attew.

The initial $100 million, paid in three tranches, is aimed at further de-risking, definin,g and enhancing value-adding opportunities at Cascabel, and completing financing activities and the feasibility study. SolGold expects the three tranches of the initial deposit to provide sufficient funds to advance the project to a final development investment decision. The required de-risking, engineering, financing, and permitting activities are anticipated to take approximately 24 months to complete.

The first tranche of $33.4 million will be available to SolGold upon the finalization of customary closing documents.

The second tranche of $33.3 million (expected in 2025) will be available upon certain conditions being met including the execution of the amended investment protection agreement, completion of the geotechnical drilling, and finalization of the tailings storage facility (TSF) design sufficient for a minimum of ten years of operation.

The third tranche of $33.3 million (expected at the end of Q4 2025) will be disbursed upon certain conditions being met including submission of all final permit applications for the construction and operation of the project and the TSF, and other necessary documentation.

The construction deposit of $650 million for project development will be disbursed upon certain conditions having been met including a board-approved final development investment decision and evidence of the availability of all equity and other sources of funds for full funding to completion. The deposit is payable in installments upon achieving specific milestones, permits, and approvals related to project advancement and construction.

The syndicate will receive an amount of 20 percent of the recovered gold in concentrate from Cascabel until 750,000 ounces of gold have been provided, after which the percentage will reduce to 12 percent for the life of the mine.

NEXT STEPS

SolGold plans to initiate the next phase of project advancement immediately, focusing on geotechnical drilling of the tailings storage facility, additional metallurgical testing, reserves definition at the Tandayama-Ameríca deposit, hydroelectric power opportunities, plant location, and mine site design and layout, as well as securing necessary land access rights for infrastructure and commencing work on the FS. Throughout this period, SolGold will work closely with Franco-Nevada and Osisko to meet all agreed milestones and ensure timely disbursements of funds to SolGold.

ECONOMIC IMPACT, COMMUNITY ENGAGEMENT, AND GOVERNMENT SUPPORT

The Cascabel Project represents the most significant investment in Ecuador’s mining history. It is expected to generate substantial economic benefits, employment, and economic opportunities both on the project and downstream. The Ecuadorian government has shown strong support for the Cascabel Project, recognizing its potential to significantly boost the Ecuadorian economy. The government’s commitment to creating a favorable investment environment has been crucial in advancing this historic investment.

SolGold is committed to sustainable development and will continue to engage with local communities to ensure the project delivers long-term positive impacts. The support from the Ecuadorian government and the ongoing engagement with local communities are essential components of the project’s success and its positive contribution to the region.

SolGold is a leading resources company focused on the discovery, definition, and development of world-class copper and gold deposits and continues to strive to deliver objectives efficiently and in the interests of shareholders. The company operates with transparency and in accordance with international best practices. SolGold is committed to delivering value to its shareholders while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace, and minimizing environmental impact.

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