Under thick cloud, dense jungle and a left-leaning government, investors are betting that the world’s largest copper deposits extend along the Andes


Flying surveys over Ecuador’s mountains, mining companies are spending $1bn per annum on exploration in the country, its new mining ministry says

“We think it’s the best discovery since Oyu Tolgoi”

Toronto-based banker Bob Sangha has traded in and out of SolGold’s Cascabel project via his company Maxit Capital


Nick Mather

At Quito airport, fund managers step off a KLM flight to look round a copper project owned by an Australian company, SolGold. In London and Toronto, investors are manoeuvring in the stock, up tenfold in three years. And in Brisbane, CEO Nick Mather is sitting within reach of a beer in the fridge, zooming-in on copper systems on Google Maps. “Not every day is a good day,” he tells Global Mining Observer. “There have been many times in London where I’d wake up and just walk in circles around the park.”
Having previously hit it big in coal and mineral sands, Mather was struggling to raise money, using mules to lug drill rigs around SolGold’s Cascabel project in Ecuador in 2016. Three years on and the site is covered in roads, 12 rigs turning. Mining groups are spending $1bn per annum in the country, its mining ministry says, betting that the world’s largest copper deposits in Peru and Chile extend along the Andes. Mather has meanwhile drilled-out 2bn tonnes of mineralisation. “We think it’s the best discovery since Oyu Tolgoi,” says Toronto-based banker Bob Sangha.
Tough on costs, a self-professed “opportunist”, mailing-out equity placings to investors from Brisbane directly to cut out the cost of a broker, Mather is “not the most user-friendly CEO”, one investor says. But he is a “very determined and driven geologist”, using parent companies and a private trust to take early-stage projects, vending them into listed subsidiaries, creating a web of cross-holdings.
“We like to go into very prospective terrain, look at data on a big scale, peg a very big tenure position,” Mather tells Kitco News. “That means we have a province, that makes us indispensable to governments, it commands the attention of capital markets, it keeps competition out and it means we can easily raise capital.”
Going into “yellow-light” countries, including Chad, Ghana and the Solomon Islands, he says Australia was “built off great risk-takers. At every scale Australians like having a punt, whether it's on a horse or flipping a coin or a mining stock.”
Shuffling equity deals and board seats, he has brilliantly managed an auction in SolGold’s stock, drawing in Newcrest and BHP, two of Australia’s largest companies, as two of SolGold’s largest investors. “For BHP twenty years out, they're thinking this is going to be one of the special ones,” one Canadian executive says.
With cash in the treasury and 1.8 billion shares outstanding, is Nick Mather using SolGold’s equity to finance drilling, before shifting control to another vehicle? “I can’t comment on any of that,” he tells Global Mining Observer. “What I can be definite about is that there won’t be any shifty deals.”

SOLG:LSE || 111 Eagle Street, Brisbane

Steve Garwin

“Geology is the basis for everything,” says Dr. Steve Garwin, an American geologist from Stanford who uses bornite levels, chalcopyrite ratios and obscure geological correlations in outcrops at surface to look underground through kilometres of rock. Precise, exacting, theatrical, Garwin has worked all round the Pacific and was chief geologist for Newmont, but currently leads exploration for Brisbane-based SolGold, staking 72 concessions in Ecuador, hitting a kilometre of copper at its flagship Cascabel project. “It’s big and it’s getting bigger,” he says. Porphyries come in clusters, Garwin adds; the first may not be the best.

Robert Fergusson

With generous handshakes and a masters in international law, Fergusson is one of Australia's most valuable diplomats.
Previously posted to Beijing and East Timor, he spends more time tweeting in Spanish from Quito these days. Behind the warmth: billions of dollars of foreign direct investment. Based in Santiago, Fergusson is Australia's most senior ambassador in South America, sitting in on meetings between BHP, Fortescue and Ecuador's mining ministry, smoothing-over customs delays, overseeing deals by Australia's largest companies.
With five mines in construction, two due in 2019, Ecuador will soon “get hooked” on the tax receipts, one foreign investor says. “We are no longer just a potential mining destination,” Ecuador's vice-mining minister tells Reuters. “We’re the country where any large-scale mining company needs to be.”

Martin Vizcarra Anglo American’s
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Fredy Salazar

Investors who make it through Ecuador’s ministries soon meet Fredy Salazar.
Tougher than the machete in the bag he carries, equally inscrutable, Salazar worked for oil giant Texaco in the ‘90s, joining gold miner Newmont as a geologist. Exploration was hit by the Bre-X scandal, Ecuador was hit by a banking crisis and his US dollar salary disappeared with a 300 million sucre break-fee (around $30,000), deposited in a bank in Quito that went under. But Salazar kept exploring, taking-on concessions on his own account, taking brokers from Vancouver through the jungle, cutting his way through environmental issues and tax, striking equity deals with trading house Trafigura and China's Zijin Mining.
His companies now stand behind Ecuador’s biggest discoveries. Drawing on deepwater port operators, shopping mall billionaires and bankers at JPMorgan, he also has a line into the president's office. “Like any country, there are challenges,” one executive says. “I ask Fredy what is actually go on, then I take it from there.”

Keith Barron

Paddling across rivers on rafts, using laser-based surveys to scan huge tracts of land, Dr. Keith Barron is an eccentric Canadian geologist behind Toronto-listed Aurania Resources, which has put together thousands of hectares in Ecuador, finding 12 per cent copper in boulders in streams near the Peruvian border.
“Most companies make the mistake of exploring small land packages,” he says. “They hammer away at it again and again and they keep hoping they’re going to hit the big one and the chances are always diminishing every time you do another drill campaign. My approach to exploration has always been to maximise the land that you have, if nobody has been there before.”
His previous company, Aurelian, hit 10m ounces of gold and 14m ounces of silver under an agreement with Fredy Salazar. Having listed at 50 cents, Aurelian was bought out in 2008 for $1.2bn at $32.80 per share, but the buyer, Canada-based Kinross, failed to negotiate its way through Ecuador’s windfall taxes, flipping the asset on in 2014. “Ecuador’s biggest exports are shrimps, flowers and bananas,” Barron tells Mining Beacon. “It needs mining.”

ARU:TSX-V || @AuraniaLtd

Ron Hochstein

Surrounded by whooping monkeys and the world’s densest population of butterflies, Canada’s Lundin Gold is sinking 8kms of tunnelling into $15bn of Ecuadorian gold.
Flying between Spanish lessons in Quito and investor meetings in New York, the company is led by engineer Ron Hochstein. Previously in uranium, he has spent 20 years working for groups controlled by billionaire Lukas Lundin, who bought Ecuador’s largest gold deposit for $240m in 2014. Hochstein has pushed the project through millions of man hours, putting up power lines, quarrying to build roads, using 3D goggles to train local workers. With high-margin grades of 9 grams per tonne, output is due before the end of 2019.
Pumping money into universities, melon farms and coffee co-operatives, his main achievement has been landing a deal with the government, softening Ecuador’s tax code, tipping the scales for other investors. “We know that bankers and the industry are looking,” Ecuador’s mining minister told Global Mining Observer before the deal was announced. “Ecuador as a frontier play is certainly not the no-go investment destination that it was in the past,” one buy-side analyst says.

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Christian Kargl-Simard

Banker Christian Kargl-Simard was fishing for Atlantic salmon when one of his clients announced the idea of launching a new base metals company, Adventus.
Closing over-subscribed bought deals, pulling in backers including private equity group Greenstone, the shares have doubled since they listed. Kargl-Simard, 35, now has an office with a ping-pong table above the Toronto Stock Exchange and teams on the ground in Ecuador flying surveys over the jungle, battling thick cloud, stormy weather and frequent equipment failure. Under an earn-in agreement with Fredy Salazar, Adventus has drilled 10 per cent copper equivalent over 20 metres.
“In Ecuador you can still walk in valleys and find mineralised outcrop that nobody's ever walked on. That’s the opportunity,” he says over breakfast in London. Rich copper deposits in the Andes don’t “stop at the border with Peru and restart in Colombia. It's Ecuador's time to catch up and grow its mining industry.”
As a banking adviser, Kargl-Simard was relentless in pitching deals, former clients say, bundling-up royalties and streams from Brazil to Manitoba. “He likes to transact,” says a former colleague.

ADZN:TSX-V || 220 Bay Street, Toronto

Fraser MacCorquodale

The highest bidder in Ecuador is Fraser MacCorquodale, head of exploration at Melbourne-based Newcrest, which pushed $264m into deals in the country last year. Lundin Gold’s deposit is seen as a carbon copy of Newcrest’s Gosowong mine in Indonesia. It is also one of few groups with the technical clout to mine an orebody of SolGold’s scale. With seven joint-ventures in the Andes and two in Ecuador, Newcrest is using new satellite-based technology to look for large deposits, kilometres below the surface. “We are open for business,” MacCorquodale tells companies. “We will talk to anyone with a good deposit.”

Michael Nossal Newcrest’s head of M&A »