SolGold PLC (SOLG.L) Expiry of Cornerstone Capital Resources Bid

The Board of Directors of SolGold (LSE & TSX: SOLG) wishes to advise that the takeover bid (the “Offer”) for all outstanding common shares of Cornerstone Capital Resources Inc (“Cornerstone”) dated June 30, 2020 expired at 5:00 p.m.

(Toronto time) on October 14, 2020. The Offer is now terminated and no longer open for acceptance by any Cornerstone shareholders. As the Offer conditions have not been met, SolGold will not take-up any securities deposited under the Offer and will return such securities to the holders thereof.

SolGold firmly believes in a clean ownership structure of the Alpala Project, however the Offer was strongly opposed by the major shareholders and Board of Directors of Cornerstone. Attempts by SolGold to reasonably engage with the Cornerstone Board in respect of the Offer were fruitless.

Cornerstone holds a minority 15% interest in ENSA and the relationship between Cornerstone and SolGold in respect of their shareholdings in ENSA is governed by two agreements dated 23 July 2012 and 24 February 2014 pursuant to which:

1. SolGold funded Cornerstone’s 15% share of feasibility on the Cascabel tenements in Northern Ecuador. Having fulfilled its earn-in requirements, SolGold is a registered shareholder with an unencumbered legal and beneficial 85% interest in ENSA which holds 100% of the Cascabel tenements.

2. Following completion of the earn-in, Cornerstone must contribute to development of the Cascabel tenements or be diluted, and if its interest falls below 10%, it shall reduce to a 0.5% NSR royalty which SolGold may acquire for US$3.5million.

3. Cornerstone may not use its interest in ENSA directly or indirectly to secure debt funding without SolGold’s consent and SolGold holds a pre-emptive right and a right to approve or disapprove of any dealings of Cornerstone in its direct or indirect interest in ENSA.

4. Cornerstone must repay to SolGold 15% of SolGold’s expenditure on the Cascabel tenements since SolGold’s earn in was completed, out of 90% of Cornerstone’s share of earnings or dividends from ENSA or the Cascabel tenements.
 

 
SolGold’s strategy to become a copper-gold mining major on the Ecuadorean sector of the globally important Andean Copper Belt is already yielding success with the discovery of the Carchaposa copper-gold porphyry at Porvenir in southern Ecuador. The first drill hole intersected more than 800m of visible copper mineralisation and was terminated in mineralisation to commence drill hole 2, closer to the prognosed core of the system. Updates will be released on a regular basis.

SolGold is exploring a pipeline of 14 wholly owned and unencumbered projects covered by 75 granted licences covering 3,200km 2 throughout the length of Ecuador. These projects have the same or better gross geological characteristics as Cascabel and provide SolGold with a first mover advantage fir copper gold porphyry growth in Ecuador.

SolGold’s strategy to become a copper gold mining major on the Ecuadorean sector of the globally important Andean Copper Belt is already yielding success with the discovery of the Carchaposa copper-gold porphyry at Porvenir in southern Ecuador. The first drill hole intersected more than 800m of visible copper mineralisation and was terminated in mineralisation to commence drill hole 2, closer to the prognosed core of the system. Updates will be released on a regular basis.

SolGold is exploring a pipeline of 14 wholly owned and unencumbered projects covered by 75 granted licences covering 3,200km 2 throughout the length of Ecuador. These projects have the same or better gross geological characteristics as Cascabel and provide SolGold with a first mover advantage in copper gold porphyry discoveries in Ecuador.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of the Regulation (EU) No 596/2014 until the release of this announcement.

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