Salazar Resources' 25% El Domo Interest Remains Fully Carried Through Updated US$298 Million Construction Budget
Salazar’s El Domo project faces budget increases and schedule delays, though carried interest shields the company from capital expenditure risk.
Salazar Resources Limited (SRL) has issued an operational update regarding the Curipamba-El Domo project, in which it holds a 25% fully carried interest with Silvercorp Metals serving as the operator. The company has revised its construction budget upward to US$298.2 million, an increase of US$14.6 million, or 5%, from the previous estimate of US$283.6 million. Production is now scheduled to begin in November 2027, a delay of four months attributed to extended rainfall associated with the Super El Niño phenomenon and higher diesel costs following Ecuador's elimination of fuel subsidies.
Despite the budget increase, Salazar’s 25% interest remains fully carried through to commercial production, meaning the company bears no financial obligation for the additional construction costs. As of September 30, 2026, US$90.9 million has been spent on construction, with process plant foundations largely complete and major long-lead equipment arriving at port. Additionally, a mining contract for open-pit stripping was awarded to China Railway 19th Bureau Group Co., Ltd. for US$35 million.
The company has also initiated Phase 1 drilling at its 100%-owned Tarqui project, targeting Yumi gold-silver veins, with results expected in early December 2026. Drilling at the Monja project is scheduled for January 2027. Meanwhile, the external power line remains delayed pending approvals from CNEL, a situation that could potentially increase reliance on backup diesel generators and operating costs.
Salazar Resources Limited (SRL) faces a delayed timeline and revised budget for the El Domo project, a development that extends the period before the company can realize revenue and cash flow from its stake. The operator has reported a 5% cost increase and a four-month schedule shift, pushing back the start of production. However, these variances carry zero direct financial impact on Salazar due to the project’s fully carried interest structure, which effectively neutralizes the downside of the budget overrun and delay.
The budget revision and schedule delay represent standard operational variances for a large-scale mine construction project in a high-rainfall jurisdiction. The news does not introduce new risks or alter the fundamental investment thesis, serving instead as a routine follow-up to previous construction updates that aligns with known weather-related risks in Ecuador. Consequently, the company remains reliant on exploration upside and equity financing until the project reaches production.
Salazar Resources Limited (SRL) is an Ecuador-focused exploration and development company. Its flagship asset is the Curipamba-El Domo polymetallic mine, which produces copper, gold, silver, lead, and zinc. Salazar holds a 25% fully carried interest in the project, while Silvercorp Metals holds the remaining 75% and operates the mine. Construction is currently underway, with the company targeting first commercial concentrates by November 2027.
An updated NI 43-101 technical report released in July 2026 confirmed an after-tax net present value (NPV) of US$573 million at an 8% discount rate and a 45% internal rate of return (IRR). The report also noted that mineral reserves increased by 10% to 7.13 million tonnes.
In addition to its flagship asset, Salazar holds 100% ownership of several exploration projects. These include the Monja copper-gold porphyry, the Tarqui-Quimi copper-gold-molybdenum porphyry and epithermal veins, the Santiago copper-gold porphyry, the El Tigre gold-silver barite volcanogenic massive sulfide (VMS) deposit, and the Pijili tungsten-silver project.