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Q&A: SolGold’s Mather maps out Cascabel plans after placing

Published: 20:24 04 Apr 2014 AEDT

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AIM-listed SolGold (LON:SOLG) has just raised £4 million through an oversubscribed placing of 45.1 million shares at a price of 9 pence each. Nick Mather, the company’s Executive Director, gave Proactive Investors’ Charlotte Kan the lowdown on what the cash will be used for.

 

Charlotte: Nick, you must very pleased about the placement. How does it set you up now as a company?

Nick Mather: The placement is very pleasing because we got a number of institutions into the company. That’s the start of the next evolution of the company from a corporate point of view. It gives us the money that we need to go through the Phase 2 drilling programme and the completion of the induced polarisation survey, which will be a very important tool in determining the three dimensional distribution of the sulphide system, which is yielding the copper mineralisation that we’ve been intersecting in the drill holes at Cascabel to date. 

This raising is going to enable us to demonstrate the three dimensionality of this very promising discovery at Cascabel and show that we’re onto a very major volume of porphyry copper-gold mineralisation, and indeed, very rich stuff as well.

Charlotte: So will the money you have raised be enough to finance all your plans, or do you need to raise more money in the future?

Nick Mather: The nature of one of these very large porphyry systems is that they tend to get bigger rather than smaller. We will, undoubtedly, need to be raising more. We believe that we’ll be able to do that at increasing prices as this project develops. That’s all down, really, to the outstanding grade of this system. The grade of Cascabel, at around two to three times what is generally encountered in porphyry copper-gold systems through South America, is outstanding.

It sets us apart from the pack and should enable us to continue to raise funds for exploration activities. We haven’t had trouble with that in the past and we’re even more assured of good outcomes for our future raisings. So, yes, we will need to raise more money. We’re looking at outlining somewhere in excess of a billion tonnes of porphyry copper-gold mineralisation here. That is going to take a considerable amount of drilling and assaying and geological work.

The accuracy with which we’ll be able to target those drill holes is going to be very much refined by the induced polarisation survey that we’re about to undertake. We’re just completing the gridding work to accurately locate the various data points for that survey.

Charlotte: Cascabel is a located in Ecuador. How is the country proving to be as a working jurisdiction?

Nick Mather: We very much enjoy working in Ecuador. It is a country that has very similar geology to Chile and Peru, where there are some very, very large porphyry copper-gold projects that have been defined. It’s only been because those projects have been much more obvious, without soil and vegetation cover in those countries, that they’ve been able to establish a long standing mining culture.

That is still going through the stages of evolution in Ecuador. Ecuador is working very hard to make sure that it is a destination of choice for the exploration and mining industry around the world. We’re finding them very cooperative to deal with. They’re very proactive in terms of making sure that we can practically address the requirements of the regulations under their Mining Act.

We believe that the evolution of the mining and exploration and environment in Ecuador will be one that will facilitate a very robust exploration and mining industry there.

Charlotte: Drilling has started at Hole 6 and it’s looking promising. What does the visible sulphite seen so far in Hole 6 mean for the company?

Nick Mather: We predicted from the very close correlation between magnetic responses and copper-gold grades in Hole 5 that there would be a relatively predictable result in Hole 6. We’re forecasting entering into the strongly mineralised potassic zone somewhere just under the 600 metres. The fact that we’re already starting to get visible copper sulphite mineralisation in the zones around 550 metres, suggests that even though we’re above the magnetic response and that we are getting copper sulphite mineralisation already, it means that our model is holding strong.

We’re still confidently predicting that we should be entering significant copper-gold porphyry mineralisation somewhere when we reach 600 metres of depth. As we know from Hole 5, if you can correlate it reliably with the magnetic response, and think we can, the copper-gold result should be quite respectable.

 

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