Mining Sector Revs Up In Ecuador

VANCOUVER– Salazar Resources (SRL-V, SRLZF-O) and Dynasty Metals & Mining (DMM-T, DMMIF-O) have received approval to resume mining and exploration activities in Ecuador from the the country’s Ministry of Mines and Petroleum.

They join a growing list of companies authorized to get back to work that already includes Kinross Gold (K-T, KGC-N) and Corriente Resources (CTQ-T, ETQ-X) (T. N. M., March 30-April 5/09).

The approvals have been trickling out from the Ecuadorian government on a company-by-company basis following the ratification of new mining legislation in January.

The legislation officially ended a nine-month ban on mining activities issued by the government in April 2008 that it slapped in place so it could review mining laws.

The green light on field operations boosted Salazar’s shares by 12¢ to close at 60¢ apiece. Dynasty gained 11¢ to $4.70 on the news.

Salazar says its drill crews are ready to restart exploration on its Curipamba property, 100 km northeast of Guayaquil.

Salazar’s primary target on the Curipamba property is the Las Naves area where, at the El Domo zone, it managed to drill enough holes before the mining ban came into effect to produce an inferred resource estimate of 4.1 million tonnes grading 3.49 grams gold per tonne, 76.33 grams silver, 0.47% lead and 4.55% zinc.

Salazar president and CEO Fredy Salazar said in an email that the company would begin drilling once it receives a water permit, expected to come “no later than the end of May.”

Dynasty, with its approval now in hand, says that it has begun commissioning its Zaruma gold mine about 150 km south of Guayaquil. The company, which has estimated Zaruma’s resource at 1.6 million measured tonnes grading 13.93 grams gold and 915,000 indicated tonnes grading 13.87 grams gold, expects the mine to operate at a 300,000-tonne-per-year capacity once it reaches full production.

The Ecuadorian government’s thumbs-up on mining activity could also help ignite negotiations over the sale of Corriente. At the end of March, Corriente reported that talks with an unnamed party, first announced last year, were continuing.

Much of Corriente’s value lies in its significant copper assets in Ecuador, which include the Mirador, Mirador Norte and Panantza and San Carlos projects, about 100 km southeast of Cuenca. At Mirador, for example, it has calculated a 438-million-tonne indicated resource grading 0.61% copper, 0.19 gram gold and 1.5 grams silver.

One notable miner that hasn’t yet announced getting the go-ahead from the government is International Minerals (IMZ-T, IMZLF-O). Nor is that the company’s only concern in Ecuador.

International Minerals is having to contend with disgruntled locals at its Rio Blanco property, 50 km west of Cuenca. The company says protesters, apparently unhappy about being laid off in light of the government’s mining ban, recently occupied the property.

Negotiations with the protesters, International Minerals says, are under way.

International Minerals has proven and probable reserves of 2.1 million tonnes grading 8.8 grams gold at Rio Blanco.