Royalty Financing Package For The Alpala Cu-Au Project

AUSTRALIA - SolGold has entered into a US$100 million Net Smelter Returns Financing (NSR Financing) Agreement with Franco-Nevada Corporation, with an option to upsize  the financing to US$150 million at the Company’s election, with reference to the Company’s flagship Alpala copper-gold project and the remainder of the Cascabel license in northern Ecuador.

Concurrently with the entering into of the NSR Financing Agreement, SolGold and Franco-Nevada have also entered into a US$15 million secured Bridge Loan Agreement (BLA) of immediately available funds as an initial advance prior to closing the NSR Financing Agreement. The full amount of the Advance will be disbursed by Franco-Nevada to SolGold today.

The Advance provides SolGold with short term funding at an interest rate of 12% per annum for a four-month period, with an option to extend the maturity for another four months. The Advance is in any event repayable with interest upon closing of the NSR Financing. Franco-Nevada and SolGold have each received all required corporate approvals for entering into the transactions.

Nicholas Mather, SolGold's Chief Executive Officer said, “SolGold is immensely excited to further progress Alpala in the run up to final feasibility and a development decision, and for Franco-Nevada’s endorsement of the Alpala Project.  The US$100 million of funding generated, plus the option to upscale the royalty by US$50 million for an additional 0.5% NSR at SolGold’s option, will see the rapid advancement of the Alpala Project”.

Paul Brink, President and CEO of Franco-Nevada said, “Alpala is an exceptional orebody and one of the most attractive block cave development projects globally. We would welcome the opportunity to provide a gold stream financing as part of the construction financing of the project”.