Ecuador inks investment agreements with Adventus, Atico

Ecuador has inked investment agreements to support the development of two gold mining projects held by Canadian companies: Adventus Mining‘s (TSXV: ADZN) Condor, and Atico Mining‘s (TSXV: ATY; US-OTC: ATCMF) La Plata.

The agreements lay out both companies’ and Ecuador’s interest in negotiating a future investment protection agreement (IPA) outlining the project’s scope, investment commitments, and permitting timelines. They were formalized on Tuesday at the Prospectors and Developers Association of Canada convention held in Toronto. Attending the event was Ecuador’s President Daniel Noboa, elected in October, as well as Minister of Energy and Mines Andrea Arrobo; Minister of Production, External Commerce, Investments, and Fisheries, Sonsoles Garcia; and Minister of Foreign Affairs, Gabriela Sommerfeld.

Canada and Ecuador are working to negotiate a free trade agreement. Canada is already the Latin American nation’s largest foreign investor, injecting $2.6 billion into its economy in 2022. Vancouver-based Lundin Gold (TSX: LUG) operates one of two large-scale mines in the country, Fruta del Norte. 

On Monday, Canada agreed to an up to $120-million, 10-year sovereign loan to Ecuador to assist in its energy transition.

The investment agreements come as Solaris Resources (TSX: SLS) is facing Indigenous opposition at its Warintza copper project in Ecuador while at the same time signing a cooperation agreement with the country’s largest Schuar Indigenous organization.

Condor agreement

The Condor agreement — under which Adventus commits to investing US$100 million — provides a foundation for an IPA, which would be required for future mining construction and operations, Adventus said.

The amount includes US$52 million of historical spending on the project from 2010 to 2023, and the future investment commitment of US$48 million for the period between 2024 and 2038. The agreement also extends to include any additional investments made by the company during the period, which would be included in the future IPA.

Condor represents a highly mineralized project comprising multiple deposits that together hold 2.3 million oz. of gold in indicated resources and 4.3 million oz. inferred. The property is located 35 km south of the 9.5 million oz. Fruta del Norte project.

The project was acquired by Adventus through its recent acquisition of Luminex Resources, which had a 98.7% interest in Condor. The remaining interest is held by the pension fund for Ecuador’s armed forces personnel.

La Plata

The La Plata agreement represents a commitment by Atico exceeding US$157 million.

Like the Condor agreement, the investment encompasses most previous and future exploration, development, construction and initial sustaining investment phases of La Plata. This includes the facilitation in securing all requisite approvals, licences and permits, ensuring adherence to both Ecuadorian legal frameworks and international standards.

This agreement lays the foundational groundwork for the execution of a formal investment protection agreement in the forthcoming period, marking a significant milestone in the partnership between the Ecuadorian state and Atico, the company stated.

La Plata represents a high-grade gold-rich VMS deposit that supported a small-scale mine operation from 1975-1981. The property consists of two concessions covering a total area of 23 sq. km. along its 9-km length, which contains known mineralization in two VMS lenses and nine priority exploration targets.

An independent preliminary economic assessment (PEA) dated 2019 estimated an inferred resource of 1.9 million tonnes at an average grade of 4.1 grams gold per tonne, 49.4 grams silver, 3.3% copper, 4.5% zinc and 0.6% lead.