With
US$33 million of finance recently banked, three drill rigs on site and numerous targets to follow up on, SolGold has the cash and direction to push forward into maiden resource territory.
Nominated in the Explorer of the Year category at the upcoming Mining Journal Outstanding Achievement Awards, SolGold CEO Nick Mather talked
Mining Journal through the discovery.
Mining Journal: How was the discovery made?
Nick Mather: Cornerstone Capital Resources and the British Geological Survey had taken just 95 samples at the project, but these had molybdenum signatures indicating there were porphyry systems there. We recognised the project’s location as significant on the gold-rich section of the northern Andean Copper Belt, which was an important element of Solgold originally shifting focus from the Solomon Islands to Ecuador. The location would ensure these systems were big.
We targeted simple predictable geology and the zone subducted by the Carnegie Ridge due to its Galapagos-sourced metal endowment. Simple young porphyry systems yield very large, intact orebodies with the Carnegie Ridge ensuring the system at Cascabel was highly oxidised and rich.
The high oxidation state of Cascabel afforded by the thick, high floating, oxygenated and slowly melting Carnegie Ridge led to the formation of magnetite and the concentration of a lot of copper in the copper-rich sulphide from the bornite.
MJ: Is there a track record of discovery within the team?
NM: Yes, I am personally instrumental in the creation of projects and companies that have delivered major projects and ultimately been taken over, realising $5.7 billion in shareholder value. This has included Auralia Resources, Ballarat Goldfields and Orbis Gold in gold, Bemax Resources in mineral sands and Waratah Coal in coal.
Steve Garwin [chief technical advisor] was instrumental in guiding the 2012-2014 exploration drill programme that brought the Santa Barbara gold-copper porphyry deposit (8 million ounces of gold – now controlled by Odin Mining) in southeast Ecuador into resource status, while Benn Whistler [manager of technical services] was part of the discovery team at the George Fisher zinc-lead-silver mine in Mount Isa, Queensland.
Jason Ward [exploration manager] helped discover six volcanogenic massive sulphide [deposits that became] mines totalling 3.5 million tonnes at 3% Cu in Oman, an iron-ore-copper-gold occurrence in Sweden and the company’s founding projects in the Solomon Islands.
MJ: How much of your budget is spent on exploration?
NM: The next two years will see $7 million spent on administrative and corporate expenses, with $54 million going towards exploration. There are 95,000m of drilling scheduled with up to seven rigs over the next 12 months (three rigs now) and up to 10 by the end of year two.
MJ: Has the discovery encouraged regional activity?
NM: Absolutely. Since we discovered Cascabel, there have been visits by BHP, Rio Tinto and, obviously, Newcrest Mining, while the minister has disclosed that Fortescue Metals [Group] and Gina Rinehart from Hancock Prospecting have been here, too.
And, of course, Lundin Gold has restarted development of Fruta del Norte since we have been here.
MJ: What new technologies or methods are you using for exploration at Cascabel?
NM: We are using detailed and sophisticated 3D datasets and modelling for magnetics and induced polarisation surveys. This is delivering a 16 out of 18 hole hit rate on the Alpala system and is defining the Aguinaga Moran and Tandayama-America prospects prior to drill testing.
We use hand-drawn sections and level plans and the 3D programme Leapfrog to determine the mineral zonation, look at pre-resource mineralisation and locate the best positions for the next drill holes.
MJ: What would you say is the most important ‘tool’ for exploration?
NM: Observant and thorough geologists doing things with data, first, by hand, then by computers. Open minds, magnetics and Leapfrog also help.
MJ: How important is ‘nearology’ within mineral exploration?
NM: It’s important in that it helps to be in the same province, trend, or geological environment as a deposit similar to what you’re looking for, but just being geographically-near doesn’t always work and can be misleading.
Scale is just as important. You have to look at the way patterns in data emerge to determine the scale of effective exploration and how far away from a neighbouring orebody you need to be. Anomalous mineralisation and orebodies have a statistically-predictable spatial frequency and if your project is too small you won’t see the patterns that tell you where to look.
MJ: How do you ‘sell’ exploration?
NM: You’re selling upside. Zero to hero. Make shareholders heroes and be one of them [Mather owns 6.25% of SolGold].
You can do it by having a track record of discovery, being as heavily invested as you can and setting up a project in a big hunting area where there are lots of elephants.
I would also say you need to go after a big, rich tier-one asset that can transcend generations, always be profitable and can be developed yourself. That way, you create additional exit opportunities for your shareholders because majors eventually have to buy you.
Show that you can ‘cookie cutter’ your discovery with the scale and pattern argument and deliver results on time, budget and exceeding expectations. That way, you are constantly surprising investors.
You should also explore for a commodity where there is a deep demand-side market and target a project with some peculiar advantages. At Cascabel, that’s the logistic advantages that can save us up to $3 billion on the equivalent deposit high up in Chile with roads, water, ports and power.
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