Why Rinehart, Forrest, BHP and Newcrest are sweet on Ecuador AFR...

Why Rinehart, Forrest, BHP and Newcrest are sweet on Ecuador
AFR today
Brad Thompson
The mining executive who prepared the ground for a tenement tug-of-war between BHP and Newcrest in Ecuador is convinced a lot more copper and gold will be found in the exploration hot spot.
Malcolm Norris, who secured the Cascabel tenement a decade ago while calling the shots at SolGold, said it was no surprise that Andrew Forrest’s Fortescue Metals Group and Gina Rinehart’s Hancock Prospecting had also taken a shine to Ecuador.
Mr Norris, now the chief executive of ASX-listed junior explorer Sunstone Metals and chasing the third major copper-gold discovery of his career, said Cascabel might turn out to be big enough for both BHP and Newcrest.
“I think it is a very big system and the resource that have been drilled so far, that’s not the end of the story. There’s more to come, I’m sure,” he said.
His comments came amid an increasing ugly spat between London-listed, Brisbane-based SolGold, whose major shareholders include Newcrest at 15.2 per cent and BHP at 11 per cent, and Toronto-listed Cornerstone Capital over Cascabel ownership.
Copper has long been a key ingredient for many industrial processes, but demand has been especially strengthened by the rise of both renewable energy and electric vehicles. It's for these reasons that SolGold has described the metal as the new iron ore, and Ecuador as the world's new Pilbara. Mr Norris agreed the country had plenty to offer in terms of resources, infrastructure and as a stable mining jurisdiction.
“Ecuador will deliver a lot of discoveries of copper and gold systems over the next 10 years,” he said.
“It is highly prospective and it just hasn’t seen the level of exploration of neighbouring countries.”
Mr Norris is looking for his next big thing in copper-gold after Cascabel with SolGold and Tujuh Bukit in Indonesia with Intrepid Mines.
The same team involved with Cascabel and Tujuh Bukit is now at Sunstone and will start drilling at its Bramaderos tenement in southern Ecuador within days.
The approval process for drilling took nearly two years and much longer than the nine months it did for Cascabel in a sign authorities in Ecuador are finding a huge spike in exploration hard to handle.
There are now a lot more companies lodging many more applications and Mr Norris said Ecuador was moving to streamline what had become a long and drawn-out approval process.
“It is partly political and partly that the ministry is just so busy. I’m sure there’s a bit of a backlog for other companies, and a lot of other Australian companies, Fortescue, Hancock, Newcrest and others who are keen to get working out there as well,” he said.
The start of drilling at Bramaderos comes at an interesting time for Sunstone’s joint venture partner Cornerstone, which owns 15 per cent of Cascabel alongside SolGold’s 85 per cent.
In rejecting a hostile takeover offer this month, the Cornerstone board blasted SolGold over its mooted $C226 million ($238 million) all-scrip bid and accused it of repeated delays in providing updates on Cascabel.
Cornerstone said SolGold was late to publish drill results and updates to the market on Cascabel, late on releasing the maiden resource statement and late on releasing the preliminary economic assessment for Cascabel.
A recent SolGold presentation suggests the release of the assessment, originally scheduled for January, has been pushed to the second quarter of calendar 2019.
While warring with SolGold, Cornerstone signed an agreement with Newcrest in February giving the gold mining heavyweight farm-in rights to gold-silver and gold-copper targets in south central Ecuador.
The deal extends Newcrest’s footprint in Ecuador which first came into prominence in 2016 when it vied with BHP for the right to acquire a strategic stake in SolGold, which at that stage had drilled just 17 holes in the Cascabel tenement.
BHP also remains active in Ecuador and has just done a deal with Canada's Luminex Resources that gives it the right to own up to 70 per cent of the Tarqui copper in return for $US7 million in cash and investing $US75 million in exploration.
Mr Norris said Sunstone was looking forward to drilling its first holes at Bramaderos after some good results from surface sampling and trenching, and based on some promising drilling results from a previous explorer.
“There’s a lot of anticipation that we’re going to walk in and drill some pretty decent holes,” he said.
“That anticipation is justified I guess, but we all know the drill rig is the thing that tells us whether these projects are any good or not so we have to temper our enthusiasm.”