Zijin Mining Invests $97M In Solaris Resources, Deal To Bolster Copper Project In Ecuador

Chinese mining giant Zijin Mining Group (SHA: 601899) is investing $97 million in a Canadian mining company Solaris Resources SLS. The investment comes through a private placement of common shares, with Zijin purchasing approximately 28.5 million shares at C$4.55 each, representing a 14% premium to the closing price on Jan. 10.

"We take tremendous pride in announcing our new strategic partnership with Zijin and look forward to leveraging its deep technical expertise and financial capacity in delivering the full potential of one of the last remaining greenfield copper districts at low elevation and adjacent to the infrastructure available globally," Solaris President and CEO Daniel Earle, said in a statement, praising Zijin's track record, and operational presence in 16 countries.

Once the transaction closes, Zijin will become the second-largest shareholder in Solaris Resources, holding about 15% of the outstanding shares. The Chinese mining giant also plans to appoint a board member following the closing of the private placement, subject to regulatory approvals in both China and Canada.

Also Read: Canada Wants To Increase Critical Mineral Production, But China’s Involvement Raises Concerns

Solaris plans to use the proceeds to advance its flagship Warintza copper project in southeast Ecuador. The property boasts an in-pit indicated resource of 379 million tons grading 0.47% copper, 0.03% molybdenum, and 0.05 g/t gold (0.59% copper equivalent). Additionally, a high-grade starter pit at Warintza central, comprising 180 million indicated tons, grades at 0.67% copper, 0.03% molybdenum, and 0.07 g/t gold (0.82% copper equivalent).

Exploration geologist J. David Lowell discovered the deposit in 2000. The project faced two decades of dormancy before Earle successfully revived it in 2020.

The broader mining industry in Ecuador is currently navigating a crisis. The country is currently in the midst of violent conflicts and a war on drug gangs declared by President Daniel Noboa. Just as Ecuador started making its mark in the mining sector, the country experienced prison riots, hostage situations, and masked gunmen taking over a live TV broadcast.

So far, none of the foreign companies have decided to leave the country.

"There's an increase in the cost of production due to security issues, but those millions have been raised on the stock market and they're waiting to be invested in the next projects, which need to go ahead soon — we hope this year," mining chamber boss Maria Eulalia Silva said in an interview, per Bloomberg.

Operating mines, including those owned by Lundin Gold Inc.LUG and China's state-owned Tongling Nonferrous Metals Group Co., are maintaining normal production levels, employing enhanced security measures. Development projects by Adventus Mining Corp. and Dundee Precious Metals Inc. are also proceeding with an infusion of $1 billion as they near production.

Now Read: American Lithium Triples Peruvian Project Defies Slump In Battery Metals

Image: Unsplash