SolGold, Cornerstone release Ecuador petition update

Gold panning at the Cascabel Project. Source: Cornerstone Capital Resources Inc.

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SolGold [SOLG-TSX, LSE] and Cornerstone Capital Resources Inc. [CGP-TSX; CTNXF-OTC; GWN-FSE] expect Ecuador’s Constitutional Court to reject a petition to hold a mining referendum that could impact the Cascabel copper-gold joint venture.

A similar referendum was held in March 2019 in the Giron Canton subdivision of Ecuador’s Azuay province, with the community voting against mining activity. As a result, INV Metals Inc. [INV-TSX] is now planning to relocate the proposed processing and tailings facilities for its Loma Larga gold-copper-silver property.

The Cascabel Project is a porphyry copper-gold deposit located in the Imbabura province of northwestern Ecuador, which lies within the under-explored northern section of the richly endowed Andean Copper Belt.

Solgold recently released a Preliminary Economic Assessment for the Alpala copper-silver-gold deposit on the Cascabel Project.

According to the PEA, the project can produce an average of 207,000 tonnes of copper, 438,000 ounces of gold and 1.4 million ounces of silver in concentrates per year over the first 25 years of operations.

Exploraciones Novomining S.A. (ENSA) an Ecuadorian company owned by SolGold and Cornerstone, holds a 100% interest in the Casabel concession. Subject to the satisfaction of certain conditions, including SolGold’s fully funding the project through to feasibility, SolGold will own 85% of the equity of ENSA and Cornerstone will own the remaining 15%. SolGold is funding 100% of the exploration at Cascabel and is the operator of the project.

Cornerstone said that on May 27, 2019 certain individuals from small communities up around the Cascabel Project and other projects in northwestern Ecuador petitioned the Ecuadorian Constitutional Court in Quito to rule on whether they may legally hold a referendum to ask the question: “Are you in favour of mining in your communities?”

For a vote to proceed, the petitioners need court approval and 10% of the signatures of the voting population of the provinces involved.

Cornerstone said there is a hearing on the petition June 5, 2019 at the Court in Quito and a decision will be issued within 20 days from the filing of the petition, likely by June 24.

Lawyers for the companies potentially affected together with lawyers from state mining company ENAMI (which has concessions in the area), the Ministry of Energy & Non-Renewable Natural Resources (MERNNR) and the Solicitor General’s Office are co-ordinating their intervention in the proceeding and are also enlisting the support of local communities that would be affected.

“The lawyers agree that the Court should deny the petition because these kinds of referendums are unconstitutional to decide matters that are the purview of the National Government, such as mining,” Cornerstone said.

On Friday, SolGold shares rose 1.92% or $0.01 to 53 cents. Cornerstone was unchanged at 23.5 cents.

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