SolGold Company Update

SolGold PLC

25 October 2023

 

25 October 2023

SolGold plc

("SolGold" or the "Company")

Company Update

The Board of Directors of SolGold (LSE & TSX: SOLG) is pleased to provide an update regarding the Company's activities and ongoing initiatives following the merger with Cornerstone Capital Resources Inc. ("Cornerstone") consolidating 100% of the world-class Cascabel Project.

Key Milestones & Initiatives

ü Strategic Review Progressing - Focused on Value Maximization

-     Discussions ongoing with highly credible groups at different stages of their review

-     Over 20 active CAs in place with over 5 site visits already conducted

ü Secured Funding to Ensure Strong Balance Sheet

-     US$86 million raised through the 2022 royalty investment by Osisko Gold Royalties Ltd and equity financing, which included Jiangxi Copper Company Limited

-     Work plans funded for FY 2024 - no additional financing required in the near-term

ü Key Management Alignment with Shareholders

-     Scott Caldwell and Chris Stackhouse appointed as CEO and CFO, respectively

-     Low annual base salary of US$200,000 for the CEO and CFO; equity compensation tied to higher share prices to be "in-the-money" ensuring full alignment with shareholders

-     Meaningful personal investments by management in SolGold shares

ü Organizational Optimization

-     Nearly 70% reduction in group headcount - 282 in September 2023 vs. 894 in FY 2022

-     Significant reduction in spend achieved with a continuous focus on lowering costs

-     SolGold CEO Scott Caldwell relocated to Ecuador to lead operations in the country

ü Key Contract Terms for Cascabel Exploitation Agreement with the Government of Ecuador

-     The Exploitation Agreement covers a renewable 33-year period

-     Based on a lower corporate income tax rate of 20% (previously 25%) during the project life, sliding scale royalty of 3-8% depending on the mineral and its price ("EA Royalty")

-     Advance royalty payment of US$75 million is deductible against the EA Royalty and payable in equal instalments over three years only when the operator starts construction of the concentrator (i.e., only when major construction of the project is underway)

ü Advancing & De-Risking Cascabel - Select Next Steps

-     Development Stage Exploration Permit for Early Works

-     Amended Investment Protection Agreement

-     Permitting/Environmental and Social Impact Assessment

-     Phased Approach internal study being advanced with a revised pre-feasibility study expected to demonstrate a lower risk path for Cascabel with reduced capital intensity

Scott Caldwell, SolGold's CEO and President of SolGold Ecuador, commented:

"Since being appointed to a leadership role at SolGold, we have made tremendous progress to ensure a strong balance sheet, improve our operational focus and advance the strategic review. With the unwavering support of the Board, I have now implemented a hard reset within the organization, placing accountability to all stakeholders as a core principle. SolGold is now in its best position ever and we remain fully committed to ensuring that all shareholders are rewarded for funding the world-class Cascabel discovery.

Our top priority is to continue advancing the ongoing strategic review. Cascabel is undeniably recognized as a significant strategic asset with a high-quality resource. I firmly believe Cascabel will one day become a multigenerational mine and a substantial contributor to the Ecuadorian economy. Consequently, external groups evaluating the project are being very diligent in their review as they progress through various stages in their internal processes. In parallel, we continue to advance and de-risk Cascabel to position it as a turn-key asset."

Strategic Review Update

The SolGold Board, with its advisors, continues to advance the previously announced Strategic Review. As previously disclosed, the Strategic Review includes, among other things, evaluating and pursuing value-enhancing opportunities for the Company.

The Company is in discussions with a number of highly credible groups who are at different stages of their review with interest in Cascabel and/or SolGold's Ecuadorian exploration portfolio. There are over 20 active confidentiality agreements ("CAs") in place and over 5 groups have already completed site visits with a number of follow-up visits being scheduled. It is very clear through this review that Cascabel is recognized as a world-class asset of significance, with parties being very diligent in their review given the size and potential scale of the asset.

No Near-Term Funding Required

The Company is expected to be well funded for FY 2024 work plans due to optimization efforts implemented to date to focus spending on core activities utilizing the funding secured in 2022.

While no additional funding is required at this time, there has been interest in the block of SolGold shares acquired indirectly through the Cornerstone transaction (the "Subsidiary Shares"). There is no need to place the Subsidiary Shares at this time, and depending on the outcomes of the Strategic Review, there may be no need to place the Subsidiary Shares in the future. At the appropriate time, a determination will be made regarding the future of the Subsidiary Shares.

Recent Trading

As part of our ongoing shareholder engagement efforts, we have had numerous discussions with institutional and retail shareholders. Most of our shareholders are long-term investors with only a small percentage actively trading. Over the past six months, the average daily traded volume was only 0.1% of the SolGold shares outstanding. To put this in perspective, on average, it would take over 10 full trading days to trade only 1% of SolGold shares (assuming the same shares are not being recycled). Given our shareholder concentration impacting the illiquidity of our shares, an immaterial amount of shares traded has a relatively material impact on our share price. Similar to last year when an institution sold down its position and impacted the share price for over 6 months, in the past months another institution is understood to be liquidating their market positions which includes SolGold.

Outlined below are the holdings of our major shareholders and CEO:

Reported Holdings (Over 3%) & CEO	Number of Shares	% of Outstanding Shares
BHP Billiton Holdings Limited	310,965,736	10%
Newcrest Mining Limited	309,309,996	10%
DGR Global Ltd	204,151,800	7%
Jiangxi Copper Company Limited	180,753,608	6%
Cornerstone / SolGold Canada Inc.	157,141,000	5%
Maxit Capital LP / D. Bob Sangha	153,366,663	5%
Tenstar Trading Limited	121,002,393	4%
Nicholas Mather (Director)	89,746,710	3%
Scott Caldwell (CEO)	19,407,244	1%
Total	1,545,845,150	51%

Mr. Caldwell also commented:

"As a dedicated long-term shareholder since 2016, I too am disappointed in our current share price even though the Company is currently in the strongest position it has ever been. It is important to note that the immaterial level of trading activity in our shares that has corresponded with a decline in our share price does not reflect the intrinsic value of our underlying assets. I firmly believe the fundamental value of our shares far exceeds their current market price, and I am fully committed, alongside the SolGold team, to ensuring a successful outcome."

This announcement was approved for release by Scott Caldwell - CEO.

CONTACTS

Scott Caldwell SolGold Plc (CEO)	Tel: [phone]
Tavistock (Media)                         Jos Simson/Gareth Tredway	Tel: [phone]

ABOUT SOLGOLD

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 the environmental impact.

SolGold is listed on the London Stock Exchange and Toronto Stock Exchange (LSE/TSX: SOLG).

See www.solgold.com.au for more information. Follow us on twitter @SolGold plc

CAUTIONARY NOTICE

News releases, presentations and public commentary made by SolGold plc (the "Company") and its Officers may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to interpretations of exploration results to date and the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's Directors, including the plan for developing the Project currently being studied as well as the expectations of the Company as to the forward price of copper. Such forward-looking and interpretative statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such interpretations and forward-looking statements.

Accordingly, the reader should not rely on any interpretations or forward-looking statements; and save as required by the exchange rules of the TSX and LSE or by applicable laws, the Company does not accept any obligation to disseminate any updates or revisions to such interpretations or forward-looking statements. The Company may reinterpret results to date as the status of its assets and projects changes with time expenditure, metals prices and other affecting circumstances.

This release may contain "forward‑looking information". Forward‑looking information includes, but is not limited to, statements regarding the Company's plans for developing its properties. Generally, forward‑looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". 

Forward‑looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward‑looking information, including but not limited to: transaction risks; general business, economic, competitive, political and social uncertainties; future prices of mineral prices; accidents, labour disputes and shortages and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.  There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, risks relating to the ability of exploration activities (including assay results) to accurately predict mineralization; errors in management's geological modelling and/or mine development plan; capital and operating costs varying significantly from estimates; the preliminary nature of visual assessments; delays in obtaining or failures to obtain required governmental, environmental or other required approvals; uncertainties relating to the availability and costs of financing needed in the future; changes in equity markets; inflation; the global economic climate; fluctuations in commodity prices; the ability of the Company to complete further exploration activities, including drilling; delays in the development of projects; environmental risks; community and non-governmental actions; other risks involved in the mineral exploration and development industry; the ability of the Company to retain its key management employees and skilled and experienced personnel; and those risks set out in the Company's public documents filed on SEDAR at www.sedar.com. Accordingly, readers should not place undue reliance on forward‑looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

The Company and its officers do not endorse, or reject or otherwise comment on the conclusions, interpretations or views expressed in press articles or third-party analysis.

 

END