Ecuador Mining News Mid January

Welcome to the second edition of the new twice monthly Ecuadorian mining news roundup.  If you are reading this in your email because you signed up for the free mailing list, congratulations because you are reading this two days ahead of it being posted to the public.

National News

It's worth prefacing the national news by saying that generally Ecuador is in favor of responsible mining.  Most provinces and people in Ecuador are in favor of responsible mining.  When I cover anti-mining developments in a province or with a group of people it's news because it is different than the rest of the country.  

Most Ecuadorians want good jobs and believe that modern international mining companies have high environmental standards.  

[paywalled] Cuenca Short Stories

 
The referendum question that was approved by the Electoral Contentious Court, and that the 435,963 registered Cuencanos must answer is: “Do you agree with the prohibition of large-scale metal mining in the Tarqui river water recharge zone, according to the technical delimitation made by the Municipal Public Company of Telecommunications, Potable Water, Sewerage and Sanitation of Cuenca – ETAPA EP? Yes or no”.

[The remaining four questions have the same content, but with a different delimitation zone, changing the names of the rivers to Yanuncay, Machángara, Tomebamba and Norcay.]

The Cuenca Dispatch, Ecuador's English Language Newspaper, has a short article on the referrendum for prohibiting mining.  Like the referrendum itself it raises more questions than it answers.  What happens to projects that were permitted for exploration like INV's Loma Larga project?  What are the boundaries of these new mining exclusion zones?

A Video Interview (in Spanish) with an Ecuadorian Mining Chamber Trustee

These are prety standard pro-mining talking points from a pro-mining organization.  Worth noting one of his points roughly translates to: if results of the referrendum result in existing advanced developments like INV metals losing their investment it will have a very negative effect on investor perception.  

Company News

It's been a slow first week and a half as people caught up from Christmas, but news is starting to pick up in the last few days.

Lucky Minerals Announces Private Placement of up to $5,000,000

I don't usually report on exploration companies issuing shares and try to focus on the business developments.  In this case I'll make an exception.  Jan 12 Lucky traded at $0.095, on Jan 13 they anncounced they were issuing up to $5,000,000 CAD in shares at $.08 including a warrant with a strike price of $0.15.  

The announced dollar amount is larger than their current market cap.  No updates on the joint venture earn in with First Quantum were included.  But it's worth referring to this from Lucky's July 6, 2020 press release:

An initial exclusivity period shall expire on January 23, 2021 at which time the parties may enter into an option and joint venture agreement on specific targets on a portion of the Fortuna 3, 4, 5, and 6 Concessions.

Luminex Starts Condor Project PEA

The Condor PEA will focus on the Northern Epithermal Area and will include the Camp, Soledad, Cuyes and Enma deposits. The scoping work calls for advancing the Camp deposit as an underground operation to be codeveloped with open pits at the other three deposits.

The Condor project is advancing.  I wasn't impressed with the early Camp deposit drill results.  The veins are pretty narrow, pretty deep, and the grade isn't very high for underground mining.  But it's early days in Camp drilling and even a mediocre underground deposit added to a project with three open pit resources can improve economics by extending mine life or increasing the size of the total resource enough to justify a larger production mill.  The Condor project overall is quite promising and one to keep an eye on for sure, great to see the PEA getting started.

Adventus & Salazar Announce Drilling Results at the El Domo and Provide an Update on 2021 Exploration and Development Plans in Ecuador

El Domo delivers more infill drill hole results and they add some detail on their continued joint exploration plans.  

Infill drilling continues at El Domo with two diamond drill rigs
...
One drill rig is currently drilling at the La Vaquera target [Curipamba near El Domo], approximately 8 km southwest of El Domo, and is expected to relocate to other targets this year
...
One drill rig is currently completing the maiden drill program at the Mercy concession – one of three concessions that constitute the Pijili project. Drilling for this current program is expected to be completed during the first quarter, with drill assay results to be released when confirmed
...
The Partners expect to mobilize and commence drilling [at Santiago] during the second or third quarter for a minimum 2,500 metre initial drill program

Titan Minerals Chairman's Letter to Shareholders

The assets owned by Dynasty Gold, then Core Gold, and now Titan Minerals have always looked promising.  We won't rehash the history of Dynasty Gold and Core Gold, but suffice it to say neither company seemed capable of developing the assets to their potential.  Titan Minerals lays out a recap of their year and I have to say their professional competence looks good so far.  Maybe this team from the land down under can turn around what the previous owners from the north couldn't.

Titan Minerals Drills 6000m

Titan had a 12,000m drill program and it's over 50% done, with at least 21 holes totaling 4,560m at the lab.  It's not clear how much of that drilling is just confirming historical drilling and how much is really testing new ground.  It will surely be a mix of both.

When the results do come out it's important to evaluate them in context, as you would for any explorer.  Imagine you are an explorer and you want to confirm how accurate the historical drilling was by twinning a hole (drilling a new one right next to the old one).  Well, you'll pick the very best historical holes to twin so you can confirm the accuracy and have really good results to report.  Or image you want to confirm the continuity of mineralization by infill drilling.  Well, you'd pick two very good historical holes and drill halfway between them.  For these reasons and more initial drill programs in areas with good historical drill results often deliver very good headline numbers.  It's much more interesting to extend the strike length, to extend the resource at depth, or to find economic levels of mineralizations in new areas that hadn't been drilled before.  

Old News I Missed

Aurania A Year End Message to Stakeholders

Worth reading this whole letter if you are interested in mining in Ecuador.  In particular this stood out to me:

A small but vocal anti-mining faction has attempted on four occasions recently to stir up trouble in our local communities ahead of the national elections. I am happy to report that in the first three cases more than 30 “Sindicos” or village Headmen, attended on their own volition and supported our Company. Moreover, they were furious that the Shuar were being “co-opted” into anti-mining movements by other indigenous organizations that did not speak for them. So little support was gained by the anti-mining factions that their last Press Conference had to be held in the town of Puyo, in the Province of Pastaza. This would be rather like protesting mining in Quebec, yet holding your meeting in Toronto.

It appears that the Warints and Yawi villages aren't the only Shuar that support mining.  It's very hard for an outside observer to figure out if the vast majority of Shuar are supportive of mining and it's a vocal minority that are opposed to mining or if a vast majority of Shuar are opposed to mining and it is only certain Shuar villages that are supportive of mining.  The eventual answer to that question could have a big impact on Aurania and Solaris among others.

Waiting With Anticipation

Here's some pending news I am waiting on.  I'm sure it's a fraction of the news I should be waiting on.

Pending Assays

• Salazar Los Osos Hole 1&2. Their public announcement indicated wide mineralization but only the assays will tell if the grade is interesting or not.
• Aurania drilled 6 "scout" holes at the Tsenken targets. Holes 1-3 showed no mineralization, but I'd love to see the assays of holes 4-6 when they come back.
• Adventus exploration drilling could be interesting. They are drilling regional targets at Curipamba and discoveries there could be combined with their El Domo deposit. They are also Porphyry hunting at their Pijili project. The Pijili project drilling has been underway for awhile and is expected to be completed this quarter, so results should start flowing out in short order.
• Titan Minerals drilled 6000m of holes at least 4560m of which are already at the labs. Expect some results this month.

The Presedential Election is likely to elect a pro responsable mining candidate and unjam some of the buracracy at the national level.

The reopening of the Mining Cadastre and the granting of pending exploration licenses.

The Cuenca anti-mining referrendum is likely to pass at the same time at the presidential election. Maybe then we'll get some clarity as to the affected geography and what stage of projects are impacted.