Solaris Resources, a copper exploration company advancing the Warintza Project in southeastern Ecuador, recently announced a strategic investment by Zijin Mining Group, set to further strengthen its balance sheet and significantly accelerate exploration activities at its flagship Warintza copper-gold project in Ecuador this year. Let’s take a closer look at how the company’s financing and drill plan for 2024 will impact progress at the project and an update to the project’s mineral resource estimate.
Zijin Invests $130 Million in Private Placement
In January 2024, Solaris Resources announced it had entered into a subscription agreement for a private placement of approximately $130 million with an affiliate of Zijin. Under the terms of the agreement, Zijin will subscribe for 28,481,289 common shares of Solaris at a price of $4.55 per share. This represents a 14% premium to Solaris’ share price at the time the deal was announced.
This financing comes in addition to the $80 million financing package announced in December which funds the Company’s baseline programs for 2024 and 2025.
Upon closing of the private placement which is expected in Q2/24, Zijin will own approximately 15% of Solaris on a fully diluted basis. The capital injection further strengthens Solaris’ strong balance sheet, providing additional funding to accelerate exploration and development activities at Warintza beyond the baseline programs.
Use of Proceeds to Advance Warintza
According to Solaris, proceeds from the strategic Zijin financing are expected to be used primarily to aggressively expand its 2024 and 2025 baseline programs to bring ten rigs into operation, and significantly scale up its regional exploration programs, including land consolidation, and commencing infrastructure and site development for fast-tracking the project.
The company will also have expanded regional exploration programs focused on key targets beyond the main Warintza cluster deposits, enabling additional target delineation through soil sampling, geophysics, trenching and early-stage drilling. In addition to this, Solaris is scaling up technical studies such as metallurgy, geotechnics, and infrastructure planning to accelerate the studies timeline.
Major Exploration Results Expand Warintza’s Potential
Solaris is on the cusp of releasing an updated mineral resource. The Company has released a series of positive drill results and new discoveries since its prior resource estimate published in April 2022. An updated mineral resource estimate is expected in late Q2/24 to take in nearly double the meterage of the prior estimate and deliver major growth at Warintza Central, Warintza East and the recent discovery of Warintza Southeast within a common pit shell. Early indications point to major growth to come in the overall resource.
Drilling will continue after the updated mineral resource estimate with a focus on opportunities for further growth and infill drilling of at least 30km, taking advantage of additional permitted platform locations to optimize the drilling pattern, with some of these holes doubling as metallurgical and geotechnical and hydrogeological holes for mine design purposes.
With the accelerated drilling and exploration programs to be funded by the Zijin financing, Solaris is well-positioned to continue expanding Warintza’s footprint in 2024. The Company appears to be successfully executing its strategy of consolidating an entire emerging copper-gold district in Ecuador.
A Very Active 2024
The strategic investment by Zijin further strengthens Solaris with an optimal financial position to aggressively advance exploration activities at its Warintza Project in 2024 and 2025 beyond its baseline programs. The capital injection comes at an opportune time, with Solaris set to deliver significant resource growth on the back of very positive drill results over the past year. With exploration soon to be ramping up to ten rigs after the closing of the Zijin financing, the remainder of 2024 is setting up to be Solaris’ most active at the Warintza Project in recent years.