www.solomongold.com
Solomon Gold holds several tenement positions in the Solomon Islands, for minerals exploration, focusing on copper and gold rich porphyry systems and high grade epithermal gold mineralisation. In relation to its main tenement holdings on the island of Guadalcanal, the Company enjoys a Joint Venture with Newmont Ventures providing for Newmont to earn a 70% interest by expending US$12m over 5 years. Solomon Gold is the current manager. On 2 December 2009, the Company announced the acquisition of two Queensland (Australia) based gold exploration companies, Acapulco Mining Pty Ltd and Central Minerals Pty Ltd.
Fairfax looks for Solomon Gold to realize value from reorganization and Newmont JV in 2010
Fairfax noted the transformation of Solomon Gold (AIM: SOLG) over the past year including board changes, diversification of exploration areas and the JV (joint venture) agreement with Newmont Mining Corp (NYSE: NEM) over the gold exploration project on Guadalcanal, Solomon Islands. The broker believes these changes should produce results through the current year.
The report highlighted the acquisition of assets with near-term production, including Central Minerals Pty with licenses over the Rannes project close to Newcrest’s Cracow mine in Queensland and Acapulco Mining Pty that held extensive tenements over the Mt Perry area of Queensland close to Lihir’s Rawdon mine. The resource on these two projects, both of which have undergone extensive drilling, is expected to be defined within 12 months, while production is set to commence within a few years with a six month exploration plan and budget already in place.
The company also acquired the Fauro island project in northern Solomon Islands, which Fairfax said is similar to Lihir.
Other major developments included the JV agreement with Newmont Mining that was signed in March 2009 and is currently progressing at a faster pace than expected. Newmont, which can earn 51% by spending US$6 million over three years and 70% by spending US$12 million over six years, has already spent A$5 million on exploration.
Fairfax pointed out that the Newmont JV gave it a financial and technical backing of a major gold miner over the Guadalcanal project and the new Queensland assets have been significantly derisked. The broker compared the company’s current state with that from twelve months ago, when Solomon Gold was a junior company focused on the expensive business of exploring for giant-copper porphyry deposits in challenging terrains.
