Pre-Feasibility Study Update - Alpala Project, Cascabel Concession, Ecuador - Seite 2

Anticipated benefits of the revised approach being studied include lower expected execution risks, lower expected pre-production capital and significantly reduced time to first potential production.

SolGold is also investigating options that could provide further upside to the value of the Project including:

• near-surface, open pittable mining options at and near the Alpala deposit; hydroelectric power options to reduce power costs;
• further metallurgical testing to increase copper, gold and silver recoveries; and
• electrification of underground production mobile plant, thereby reducing requirements for fuel, emission control and ventilation with additional likely reductions in capital expenditure and operating costs.
  

A number of proof-of-concept level studies on these options have been initiated beginning with geotechnical and mining options. These are being followed with more detailed studies and are expected to be included in the designs for downstream processes and infrastructure. These studies are on track for the delivery of the PFS in late 2021.

The Company is of the view that the Alpala resource is one of the most significant copper-gold porphyry discoveries of the last decade. It has the potential to become a key source of future copper supply amid an expected growing medium-term market deficit, reflecting limited new project development, a declining base production and growing demand supported by the shift towards electrification and decarbonization. SolGold and Cornerstone plan to provide further progress updates as the revised PFS advances during the remainder of the year.

Commenting on today’s PFS update, SolGold Interim CEO, Keith Marshall, said:

“The revised mine plan being studied underpins the whole of the Alpala Project. The plan being studied is smaller in scale initially, but a much more selective and simpler approach to mining the deposit. In my view, the big advantages of underground mining over open pit mining are sequencing and selectivity. With underground mining you can target which areas of the orebody you want to mine and when. The previously studied plan was the equivalent of an inverted open pit, with limited selectivity, that would likely have resulted in the mining of larger volumes of waste material.