RESOURCEStocks: Firstly to SolGold’s 85%-owned Cascabel project: drilling at the Alpala copper-gold deposit is continuing to produce big intersections including a recent highlight of 695m at 1.37% copper equivalent. How is work progressing to establish a maiden resource and what timeframe are you aiming for?

Nick Mather: We have seven rigs active, there are three more en route and should be on site by the end of November. The use of Devico, which is the directional drilling technique used to drill daughter holes off parent holes, allows us to keep more drill bits in the mineralisation. In order to define an inferred resource we are working on 125m intersection spacing through the ore body, on the recommendation of the independent consultants. We expect the area of mineralisation to get bigger and bigger well into next year. But nonetheless, we intend to publish our maiden resource statement by the end of 2017.

RS: Drilling is yet to find the limits of Cascabel’s Alpala mineralised system, how can you best describe its scale?

NM: It’s a world class, tier 1 project. It has the necessary high grade cores to transcend metal price cycles, and it’s big enough to last generations. Cascabel sits in a belt of Eocene aged rocks, about 38 million years old. These same rocks in a 700km section of northern Chile, host deposits that cover about 25% of the world’s copper resources. Cascabel is the first of a whole portfolio of projects that SolGold owns. Drilling at Alpala to date demonstrates an orebody that extends over 1.3km long, up to 700m wide and from surface to 1840m in depth. It is a very big system and it’s extending to the East, Northwest and at depth. We haven’t found the limits yet and we expect that the maiden resource statement will just be the tip of the iceberg so to speak.

RS: You’ve increased the number of rigs, and man-portable drill rigs to the drilling programme, what are the benefits and limitations of using the man-portable rigs?

NM: Man portable rigs can’t go quite as deep as the track-mounted ones, nor can they drill as quickly, but they have the major advantage of a lower environmental impact because they can be fully dismantled and taken through narrow paths in dense vegetation. The big long raking holes that we have planned for next year with rigs 8-12 will be track mounted rigs and will rapidly drill down to the deeper parts of the ore body right along the strike of it. The Devico directional drilling technique will be able to drill many daughter holes off every parent hole and the deep, track-mounted rigs will be highly suited to that.

RS: Alongside the activity at Cascabel, SolGold has made a new discovery in Ecuador’s south at its 100%-owned Machos-Florida Santa Cruz-La Hueca project with rock chip samples of up to 13.82% copper. SolGold has described this as a “Jurassic-age copper monster” – how does it compare with Alpala and what are your exploration plans?

NM: La Hueca seems to be more extensive at surface than Alpala and some of the rock chip results are significantly higher grade than we had at surface at Alpala. It has the potential to be bigger and richer than Alpala, and it is 100% owned by SolGold. We are very excited by this project. It sits in a 25km long trend of porphyry systems. We don’t actually know the age of the porphyries themselves, some of the host terrain is Jurassic. We have a lot more work to do on it - we will need to fly airborne magnetics over it and do a lot more prospecting. We are very interested in a 5km long zone up to 1km wide in La Hueca which is covered with quartz veining and outcropping copper mineralisation.

RS: How did the Cascabel “blueprint” assist with this discovery and where will it be used next?

NM: The Cascabel blueprint assisted with the discovery because we’re able to now recognise the significance of different mineral assemblages and alteration styles. We’re also able to see the importance of vein intensity and the level of magnetite mineralisation. We now understand the importance of the molybdenum content, so seeing free molybdite in these samples is very encouraging because it means it has a big molten batholithic source which is giving rise to the porphyries and collecting all the metal that end up in the porphyry system. What we’ve learned at Alpala has been very important and is certainly guiding us to where the best potential prospects are throughout the rest of Ecuador.  We are particularly interested in southern Ecuador. We have 22 targets across the rest of the country, we have secured 14 of these and we are currently working on securing the other eight.

Applying this success blueprint across Ecuador is part of our strategy to make SolGold the best opportunity for copper growth in the world. We’re going into a copper market over the next couple years which has been predicted, by nearly every analyst globally, to be in deficit. We have high expectations for the copper price outlook and combined with the discovery of more large super-systems on the same belt of rocks that host them in Chile, like Escondida, Chuquicamata and Collahuasi, should bode well for the exploration outcomes in SolGold.

RS: SolGold has been at the forefront of an exploration rush in Ecuador and your subsidiaries now have 59 tenements in the country. What can investors expect to see from these holdings in the coming year?

NM: Investors can expect more of the same. Inside of all of these tenements we believe it is highly likely that we will find another Cascabel, or something very similar. We think it’s likely that we will find one that has a bigger surface expression. We are very optimistic that the exploration programme will result in the definition of numerous porphyry systems that will justify significant exploration programmes. We currently have 50 geologists on the ground and this will increase to 100 next year. I suspect that’s more than the on ground exploration effort of most majors. Accordingly, given our market capitalisation, we are better placed to outline a number of company-making copper gold discoveries, which will have a higher impact on shareholder value than in the majors. We have fewer shares, more geologists and a better exploration tenure position.

RS: The company has just struck its first purely institutional investment deal, through an underwritten £45 million bought deal private placement at a discounted 25p per share with a syndicate led by National Bank Financial Inc. and Canaccord Genuity Corp. What does this mean for SolGold and its shareholders?

NM: It’s important to institutionalise the share register for SolGold because, as we progress the Cascabel project through feasibility studies, and ultimately development, as well as conducting further exploration at our tenements across Ecuador, it’s important that we have a strong and deep pocketed shareholder base so that equity issues can be backed by supportive shareholders. With the announcement of our pan-Ecuadorean strategy earlier this year and our maiden resource at Alpala scheduled for the end of the year now was the appropriate time to start the process of institutionalising our share register. These funds, and support, from institutions allows us to develop the company and demonstrates to the Ecuadorian government that we are committed to the development of the mining industry in Ecuador, and not just speculating on discovery.

RS: Finally, with exploration success up your sleeve, the funds for drilling and plenty of targets, will Cascabel remain the core focus for SolGold or are you considering alternate development options?

NM: That is a moving feast. Cascabel is an outstanding world-class, Tier 1 target. A world-class target that we believe should develop into a Tier 1 mine. We can’t tell yet whether there’s going to be anything better, but in a country as underexplored as Ecuador, there’s every chance it will give us two.

The public should see SolGold as a copper exploration powerhouse in the world’s most underexplored terrain, at a time when the upside in the copper market has never been so assured. We‘re well funded and have a very supportive government.  It is an outstanding value proposition via a globally recognised exploration team.