Salazar Resources Provides Update for El Domo

The most recent news release (February 5, 2026) provides a significant construction update for the flagship El Domo project in Ecuador, operated by 75% joint venture partner Silvercorp Metals Inc. The construction budget has been revised upward to $284 million USD from the previous $240.4 million USD estimate. Furthermore, the timeline for the start of production has been delayed from "early 2027" to July 1, 2027. The budget increase is attributed to a VAT hike in Ecuador (from 12% to 15%), higher costs for process plant equipment (+$15M), and increased construction costs for "Package #1" (+$5.1M). Offsetting these are minor savings in mining costs and a significant reduction in the contingency buffer from 20% to 8%. On the operational front, substantial progress was reported for 2025, including 94% completion of archaeological unit clearing, 2.6 million cubic meters of earth moved, and the commissioning of a 600-bed construction camp.

The impact is neutral for Salazar Resources, primarily due to the 25% "carried interest" structure of the joint venture. Under this agreement, Silvercorp funds 100% of the development costs, and Salazar's portion is essentially a loan to be repaid from future production cash flows. - Negative: The $44 million budget overrun increases the "debt" Salazar must eventually repay to Silvercorp before receiving its full 25% pro-rata dividends. The 6-month delay pushes back the timeline for first cash flow, which is critical for a company with a consistently low cash balance. - Positive: The reduction in contingency from 20% to 8% suggests the operator, Silvercorp, now has higher confidence in the remaining cost estimates. The award of the mining contract to CRCC 19 and the mobilization of equipment demonstrate that the project is moving past the "paper" stage into physical reality, which de-risks the asset despite the delays. - Comparison: In April 2025, the company projected a $240M budget and an "end of 2026" start. Today's update confirms a 10-month total delay and a nearly 20% cost increase compared to early 2025 projections.

Salazar Resources is focused on Ecuadorean mineral assets. Its flagship is a 25% interest in the Curipamba Project, which hosts the El Domo copper-gold-zinc deposit. This is a high-grade VMS (Volcanogenic Massive Sulphide) deposit. The project is being developed as an open-pit mine with a transition to underground mining later in the life of mine. Salazar also maintains a portfolio of 100%-owned exploration projects (Macara, Ruminahui, Los Osos) and has recently consolidated ownership in the Santiago and Pijili projects from Silvercorp.