SolGold Loses Partner in JV

PUBLISHED: 02 Aug 2012 @ 21:45 | Comments (0) | More info about Kenneth G. Mondero

Gold and copper miner SolGold plc (LSE:SOLG) said today its partner, Newmont Ventures Limited, in the Guadalcanal Joint Venture in Solomon Islands will cease funding the project and will resign as manager of the exploration.

Newmont Ventures, a subsidiary of NYSE-listed Newmont Mining Corporation, made the decision after having spent about US$19 million in the project, which began in April 2009, in exchange for a 70% interest.

No reason was divulged by SolGold as to why Newmont Ventures decided to leave the joint venture that covers 275 kilometres comprised in five licences, located in Guadalcanal Island, Solomon Islands.

Considered a high-risk high-yield undertaking, the GJV’s latest find was 46 metres of ore with average grades of 0.34 grams per tonne (g/t) and 0.25% copper back in June.

“SolGold is in discussions with NVL regarding the exploration tenements which comprise the GJV, and will update the market in due course,” the company said in a statement.

No Surprise

Malcolm Norris, Chief Executive of SolGold, said however that the decision was not surprising and dispensed Newmont Ventures’ decision to leave the JV as an opportunity for the company to explore the potential of the area.

“The Board would like to reaffirm to shareholders the Board’s previously stated strategy of identifying and securing potential Tier 1 gold-copper assets in gold-copper belts of the world,” SolGold’s official statement read.

The company has one other project in the said archipelago and has signed a definitive option agreement, announced on 24^th July 2012, for a joint venture in Ecuador worth US$2.8 million, as well as four projects in Australia.

“The Board will consider its options and continue to focus exploration expenditure on its most prospective opportunities,” Mr. Norris closed.

Shares dropped 17.6% to 3.50 pence by 1:00 PM GMT, following the news.

Company Spotlight

SolGold plc, formerly known as Solomon Gold, was established in 2005 and became public in 2006, trading on the Alternative Investment Market. The company was incorporated in the UK and its head office is in Australia.

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