SolGold (LSE:SOLG) sat flat at 37.7p on Wednesday after revealing further drilling progress at its Cascabel project in Northern Ecuador. The firm said it has now carried out nearly 190,000m of diamond drilling at the project, with work on the greater Alpala trend this year providing further growth to the size of its resource.

Elsewhere, it has discovered previously unknown, high-grade and medium-grade mineralisation within existing low-grade inferred resources areas at the site. The business said these highlight the ongoing upgrades to its existing resource base in both the indicated and inferred categories at project areas called Trivinio, Alpala North, Alpala Northwest, and Alpala South.

Alpala lies upon the northern section of the prolific Andean Copper Belt, the base for nearly half of the world’s copper production. According to SolGold, the project area hosts mineralisation of Eocene age, which is the same age as numerous Tier 1 deposits along the belt in Chile and Peru. SolGold owns an 85pc interest in Exploraciones Novomining S.A, an Ecuadorean company that in turn owns 100pc of Cascabel.

The business will now commence geotechnical, hydrogeological, and sterilisation drill testing at the asset ahead of releasing a preliminary economic assessment report.

The company’s chief executive Nick Mather said: ‘The drilling campaign continues to deliver to our expectations with these latest results revealing previously unknown mineralisation and providing a clear indication of the growth potential that exists through the extension of the Alpala resource.’

Wednesday’s update comes after SolGold’s said it was ‘surprised and disappointed’ by Cornerstone’s swift dismissal of its takeover bid in February. The firm said Cornerstone – which owns the remaining 15pc of Cascabel, lodged its response fewer than three hours after SolGold’s approach, raising questions around how well it had considered the potential offer.

SolGold had proposed the conversion of each Cornerstone share into 0.55 of a SolGold share, equating to an immediate 20pc premium for Cornerstone holders at the time. It added that the consolidatory move would benefit Cornerstone shareholders significantly by removing the company’s ‘funding challenges’ concerning Cascabel’s development.

Author: Daniel Flynn

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