SolGold launches $20m fundraising for Alpala exploration
Ecuador-focused miner SolGold (LON, TSX:SOLG) is launching a fundraising to raise a minimum of £16 million (about $20m).
The company says the fundraising seeks to fully cover the costs of a preliminary feasibility study (PFS) for the Alpala copper-gold project, part of SolGold’s Cascabel asset.
The move, however, comes as top miners try to take advantage of the global economic downturn caused by the coronavirus pandemic, expanding their portfolios through mergers and acquisitions.
“This funding will also cover the costs of SolGold’s important regional exploration programmes and the ancillary costs of generating the $2.7 billion capital development funding package for the Alpala project,” chief executive Nick Mather, said in the statement.
SolGold placed on Thursday almost 75 million shares, at 21.5 pence apiece, until tomorrow, June 5 at 7:00 am GMT.
It follows a royalty financing agreement with streaming company Franco Nevada (TSX, NYSE: FNV), inked in May. The deal guaranteed SolGold $100 million and gives it an option to upscale to $150 million.
That is how much the miner needs for the PFS on Alpala, part of the Cascabel asset, located 180 km north of the capital Quito.
The company, a prime takeover target due to the potential of its undeveloped project in the South American country, said it expects to deliver the report in fall 2020.
SolGold also said it would use the funds to produce a definitive feasibility study on the asset, to be released in the second quarter of 2021.
The Australian miner has been in talks with multiple investors since March, hoping to secure $2.85 billion to develop Alpala. According to the latest resource update, the asset contains 2.66 billion tonnes of copper at 0.53% copper-equivalent in the measured and indicated categories, and 544 million tonnes at 0.31% copper-equivalent in the inferred category.
Once developed, Alpala is expected to produce an average of 150,000 tonnes of copper, 245,000 ounces of gold and 913,000 ounces of silver in concentrate per year during its 55-year life-of-mine.
Over the first 25 years of mining, the average annual production is expected to be 207,000 tonnes of copper, 438,000 ounces of gold and 1.4 million ounces of silver.
Despite small setbacks due to disruptions related to the coronavirus pandemic, SolGold aims to begin production in 2025.
Mather has repeatedly said his team is building a company “as important to the development of Ecuador as BHP was to Australia.”
BHP, Newcrest unhappy
SolGold’s biggest shareholders, BHP and Newcrest, have publicly urged the junior company’s directors to raise funds via equity. They argue that approach is in the best interests of existing shareholders.
BHP (ASX: BHP), the world’s No. 1 mining company, and Newcrest Mining (ASX: NCM), Australia’s largest gold producer, were not pleased with SolGold’s decision last month to agree to an eight-month loan, with interest rates of 12%.
Newcrest, the copper junior’s second biggest investor with a 15.23% interest, even considered removing its representative from SolGold’s board.
While the surprise fundraising announced today seems in line with BHP and Newcrest’s expectations, neither will participate amid concerns over SolGold’s approach to financing.
“Newcrest will not be participating in the raising. We are disappointed with the approach that Solgold management has taken in respect to financing the company,” said a Newcrest spokesman told Australia’s Financial Review.
BHP and Newcrest’ combined 30% stake in SolGold will likely shrink through dilution in the fundraising, which the Ecuador-focused miner said created an opportunity to “broaden the company’s shareholder base through the introduction of new investors.”
Copper hot spot
Over the past two years, Ecuador has attracted a flurry of interest from big miners looking to increase their exposure to copper. The highly conductive metal is in demand for use in renewable energy and electric vehicles, but big, new deposits are rare.
Copper entered a bull market on Thursday, boosted by strong demand from post-lockdown China and hedge funds closing bearish bets.
It was trading just over 20% from its March low of $4,371 a tonne on Thursday afternoon, at $5,530 a tonne. Such an increase fits the normal definition of a bull market.
Diversified majors particularly favour large-scale, long-life projects, such as the one SolGold promises. BHP upped its stake in the company last year to 15.31% from 14.7%, becoming the miner’s top shareholder.
Ecuador aims to move from an explorer hotspot to a mining exporter. Its oil-led economy has been hit hard over the past few months.
The nation is currently reeling from both the spread of covid-19 and the collapse of global oil prices.
Prior to recent developments, the South American country expected to attract $3.7 billion in mining investments between 2019 and 2020, up significantly from the $270 million it received in 2018.
Ball Mill Liner Material Selection
Different crushed material, different working conditions need different material liners to suit. Also, the coarse grinding compartment and fine grinding compartment need different material liners.
H&G Machinery supplies the following material to cast your ball mill liner:
Manganese Steel
The manganese content of the high manganese steel ball mill lining plate is generally 11-14%, and the carbon content is generally 0.90-1.50%, most of which are above 1.0%. At low impact loads, the hardness can reach HB300-400. At high impact loads, the hardness can reach HB500-800. Depending on the impact load, the depth of the hardened layer can reach 10-20mm. The hardened layer with high hardness can resist impact and reduce abrasive wear. High manganese steel has excellent anti-wear performance under the condition of strong impact abrasive wear, so it is often used in wear-resistant parts of mining, construction materials, thermal power, and other mechanical equipment. Under the conditions of low impact conditions, high manganese steel cannot exert the characteristics of the material because the work hardening effect is not obvious.
Chemical Composition
| Name | Chemical Composition（%） | |||||||
| C | Si | Mn | Cr | Mo | Cu | P | S | |
| Mn14 Mill Liner | 0.9-1.5 | 0.3-1.0 | 11-14 | 0-2.5 | 0-0.5 | ≤0.05 | ≤0.06 | ≤0.06 |
| Mn18 Mill Liner | 1.0-1.5 | 0.3-1.0 | 16-19 | 0-2.5 | 0-0.5 | ≤0.05 | ≤0.06 | ≤0.06 |
Mechanical properties and metallographic structure
| Name | Surface Hardness（HB） | Impact value Ak（J/cm2） | Microstructure |
| Mn14 Mill Liner | ≤240 | ≥100 | A+C |
| Mn18 Mill Liner | ≤260 | ≥150 | A+C |
| C -Carbide | Carbide A-Retained austenite | Austenite | |||
Product specification
| Size | Hole Dia.（mm） | Liner Length（mm） | ||
| ≤40 | ≥40 | ≤250 | ≥250 | |
| Tolerance | +20 | +30 | +2 | +3 |
Chrome Alloy Steel
Chromium alloy cast iron is divided into high chromium alloy cast iron (chromium content 8-26% carbon content 2.0-3.6%), medium chromium alloy cast iron (chromium content 4-6%, carbon content 2.0-3.2%), low chromium Three types of alloy cast iron (chromium content 1-3%, carbon content 2.1-3.6%). Its remarkable feature is that the microhardness of M7C3 eutectic carbide is HV1300-1800, which is distributed in the form of a broken network and isolated on the martensite (the hardest structure in the metal matrix) matrix, reducing the cleavage effect on the matrix. Therefore, the high-chromium alloy liner has high strength, ball mill toughness, and high wear resistance, and its performance represents the highest level of current metal wear-resistant materials.
Chemical Composition
| Name | Chemical Composition（%） | |||||||
| C | Si | Mn | Cr | Mo | Cu | P | S | |
| High Chrome Alloy Liner | 2.0-3.6 | 0-1.0 | 0-2.0 | 8-26 | ≤3.0 | ≤1.2 | ≤0.06 | ≤0.06 |
| Middle Chrome Alloy Liner | 2.0-3.3 | 0-1.2 | 0-2.0 | 4-8 | ≤3.0 | ≤1.2 | ≤0.06 | ≤0.06 |
| Low Chrome Alloy Liner | 2.1-3.6 | 0-1.5 | 0-2.0 | 1-3 | 0-1.0 | ≤1.2 | ≤0.06 | ≤0.06 |
Mechanical properties and metallographic structure
| Name | Surface（HRC） Ak（J/cm2） | Microstructure | ||||
| High Chrome Alloy Liner | ≥58 | ≥3.5 | M+C+A | |||
| Middle Chrome Alloy Liner | ≥48 | ≥10 | M+C | |||
| Low Chrome Alloy Liner | ≥45 | ≥15 | M+C+P | |||
| M- Martensite | C – Carbide | A-Austenite | P-Pearlite | |||
Product specification
| Size | Hole Dia.（mm） Liner Length（mm） | |||
| ≤40 | ≥40 | ≤250 | ≥250 | |
| Tolerance | +20 | +30 | +2 | +3 |
Cr-Mo Alloy Steel
H&G Machinery uses Cr-Mo alloy steel to cast ball mill liner. This material based on Australia standard, (AS2074 Standard L2B, and AS2074 Standard L2C）it’s provides superior impact and wear resistance in all semi-autogenous milling applications.
Chemical Composition
| Code | Chemical Elements（%） | |||||||
| C | Si | Mn | Cr | Mo | Cu | P | S | |
| L2B | 0.6-0.9 | 0.4-0.7 | 0.6-1.0 | 1.8-2.1 | 0.2-0.4 | 0.3-0.5 | ≤0.04 | ≤0.06 |
| L2C | 0.3-0.45 | 0.4-0.7 | 1.3-1.6 | 2.5-3.2 | 0.6-0.8 | 0.3-0.5 | ≤0.04 | ≤0.06 |
Physical Property & Microstructure
| Code | Hardness（HB） | Ak（J/cm2） | Microstructure |
| L2B | 325-375 | ≥50 | P |
| L2C | 350-400 | ≥75 | M |
| M-Martensite, C-Carbide, A-Austenite, P-Pearlite | |||
Ni-hard Steel
Ni-Hard is a white cast iron, alloyed with nickel and chromium suitable for low impact, sliding abrasion for both wet and dry applications. Ni-Hard is an extremely wear-resistant material, cast in forms and shapes which are ideal for use in abrasive and wear environments and applications.
Chemical Composition
| Name | C | Si | Mn | Ni | Cr | S | P | Mo | Hardness |
| Ni-Hard AS2027 Gr Ni Cr 1-550 | 3.2-3.6 | 0.3-0.8 | 0.2-0.8 | 3.0-5.0 | 1.5-3.0 | ≤0.12 | ≤0.15 | ≤0.5 | 550-600HBN |
| Ni-Hard AS2027 Gr Ni Cr 2-550 | 2.8-3.2 | 0.3-0.8 | 0.2-0.8 | 3.0-5.0 | 1.5-3.0 | ≤0.12 | ≤0.15 | ≤0.5 | 500-550HBN |
| Ni-Hard AS2027 Gr Ni Cr 2-550 | 3.2-3.6 | 1.5-2.2 | 0.2-0.8 | 4.0-5.5 | 8.0-10.0 | ≤0.12 | ≤0.15 | ≤0.5 | 630-670HBN |
White Iron Steel
Chemical Composition
| Name | Chemical Composition(%) | |||||||
| C | Si | Mn | Cr | Mo | Cu | P | S | |
| White Iron Steel Liner | 2.0-3.3 | 0-0.8 | ≤2.0 | 12-26 | ≤3.0 | ≤1.2 | ≤0.06 | ≤0.06 |
Physical Property & Microstructure
| Name | HRC | Ak(J/cm2) | Microstructure |
| White Iron Steel Liner | ≥58 | ≥3.5 | M+C+A |
| M-Martensite C- Carbide A-Austenite | |||
If you have a special material inquiry, please contact our engineer to service you!
Nick Sun NICK@XZHUAGANG.COM
Post time: Jun-28-2020