SolGold (TSX:SOLG) (SOLG:LON) has announced an $18 million investment from Jiangxi Copper Company Limited (JCC) on Wednesday. The deal will see the Chinese state-owned mining giant increase its stake in SolGold to 12.19%, reinforcing its involvement in one of the world’s most promising copper and gold exploration firms.

SolGold CEO Dan Vujcic commented on the deal in a press release: “As we endeavour to re-shape and streamline the SolGold investment proposition, this investment by Jiangxi, at a substantial premium to Monday’s closing price, is a powerful endorsement towards the intrinsic value embedded in SolGold. The proceeds will materially strengthen our balance sheet and support current efforts to unlock further value for shareholders.”

Vujcic emphasized the importance of having strong financial and strategic partners, saying: “SolGold is very fortunate to have multiple high-quality shareholders and financiers who are willing and able to assist the company in progressing Cascabel and its highly prospective exploration portfolio.”

Under the agreement, Jiangxi Copper, through its subsidiary Jiangxi Copper (Hong Kong) Investment Company Limited, will acquire 157,141,000 ordinary shares in SolGold. The shares are being sold at $0.115 per share, representing a 45% premium over SolGold’s closing middle-market share price on March 11, 2025. The shares involved in the transaction were originally acquired through SolGold’s 2022 acquisition of Cornerstone Capital Resources, now operating as SolGold Canada. No new shares will be issued as part of the deal, meaning SolGold’s total number of shares remains unchanged.

Jiangxi Copper’s Stake Grows to 12.19%

Prior to the transaction, Jiangxi Copper held a 6.95% stake in SolGold. With this latest investment, its ownership increases to 12.19% of the company’s total issued share capital, solidifying its position as a major shareholder. The investment is seen as a strong vote of confidence in SolGold’s long-term prospects, particularly its Cascabel copper-gold project in Ecuador.

Beyond the financial backing, Jiangxi Copper has also agreed to provide technical consulting services to SolGold for its Cascabel project. The collaboration will run through March 2027 and will involve Jiangxi offering expertise at no cost unless mutually agreed upon by both parties.

The Cascabel project, located in northern Ecuador, is widely considered one of the most promising undeveloped copper-gold deposits in the world. The site is expected to play a crucial role in meeting the increasing global demand for copper, a key component in electric vehicle production and renewable energy infrastructure.

Strengthening SolGold’s Financial Position

The $18 million investment will provide SolGold with additional liquidity as it continues to advance its exploration and development plans. The company has been working to optimize its capital structure, and the latest investment from Jiangxi Copper is expected to bolster its ability to fund ongoing operations without issuing new shares.

With SolGold facing the typical capital-intensive nature of large-scale mining projects, Jiangxi Copper’s increased stake signals long-term support from a key industry player.

Jiangxi Copper’s growing involvement in SolGold reflects a broader trend of Chinese investment in global mining assets, particularly in regions with high copper and gold potential. China has been actively seeking to secure supplies of critical minerals, and this investment aligns with its broader strategy of expanding its influence in the global resource sector.

For SolGold, having a major shareholder with deep industry expertise and financial resources may provide additional advantages in securing future funding and technical expertise. The partnership could also open doors for potential future collaborations beyond the Cascabel project.

The investment by Jiangxi Copper marks another milestone in SolGold’s journey to develop its flagship Cascabel project and advance its broader exploration portfolio. As the global demand for copper and gold remains strong, the strengthened relationship between SolGold and Jiangxi Copper could position the company for further growth in the coming years.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

SolGold (TSX:SOLG) has announced a joint declaration with the Government of Ecuador, paving the way for the execution of the Complementary Investment Protection Agreement (IPA) for the Cascabel copper-gold project in Ecuador. The signing took place at the Prospectors and Developers Association of Canada (PDAC) convention in Toronto, marking a significant milestone in SolGold’s commitment to the project and its partnership with the Ecuadorian government.

The Complementary IPA, signed by the Minister of Production, Foreign Trade, Investments and Fisheries, Ms. Sonsoles García, and Scott Caldwell, CEO of SolGold, represents a total investment of US $3.2 billion over the coming years in activities related to the Cascabel mining concession. This investment is in addition to the US$311 million already addressed by the current IPA, showcasing the immense scale and importance of the project for both SolGold and the Ecuadorian mining sector.

SolGold’s CEO and President of SolGold Ecuador, Scott Caldwell, commented in a press release: “The Complementary Investment Protection Agreement not only reinforces the protections for our key investment in Ecuador but also symbolizes a deepening of our relationship with the Ecuadorian State. President Noboa’s attendance and insightful speech at the PDAC convention were warmly welcomed by the mining community and underscores the significant support of his administration for responsible mining in Ecuador.“

The Cascabel project, SolGold’s flagship venture, has been the focus of the company’s efforts to unlock its potential as a multi-generational asset. A recent pre-feasibility study (PFS) released in February revealed that the company had managed to reduce upfront costs significantly, with pre-production capital for initial mine development, the first process plant module, and infrastructure now estimated at $1.55 billion, down from $2.75 billion in the April 2022 PFS.

Despite the project’s potential, investors have expressed concerns about SolGold management’s ability to deliver the project to its full potential. The company’s share price has halved over the past year, and SolGold has had to cut spending to stay afloat, leading to a strategic review of its assets.

The size of the entire resource at Cascabel indicates the mine’s potential to be one of the 20 largest copper-gold mines in South America, with mine construction set to commence in 2025. The Complementary IPA, representing the largest mining investment in Ecuadorian history, underscores the significance of the project and SolGold’s commitment to its development.

As SolGold continues to navigate some of the remaining challenges of bringing the Cascabel project to production, the investment from the Ecuadorian government and the potential for the mine to become a major producing mine in South America will be the driving force for the company and its stakeholders.