Ecuador snapshot: 10 active companies

VANCOUVER — The Ecuadorian government restructured its mining and tax policies in 2014 in a bid to bring back foreign investment that had fled the country in previous years. The move has spurred a resurgence of mineral exploration and development in the country. Here is a look at 10 such projects.

1. AURANIA RESOURCES

Aurania Resources (TSXV: ARU) has narrowed down its search for two historical gold mining centres that operated in the sixteenth and seventeenth centuries — Sevilla del Oro and Logrono de los Caballeros — to a 2,080 sq. km land package in southeastern Ecuador. The junior explorer, helmed by Keith Barron — whose Aurelian Resources discovered the 4.8 million oz. Fruta del Norte gold deposit in Ecuador — acquired the claims in March as part of its Lost Cities–Cutucu project. On April 20, Aurania closed a $6.4-million oversubscribed brokered and non-brokered offering, which saw 5.2-million subscription receipts issued at $2 per receipt. Some of the money will fund an upcoming exploration program consisting of airborne geophysical surveying, regional stream silt sampling and reconnaissance geological work.

2. CORNERSTONE CAPITAL RESOURCES

Cornerstone Capital Resources (TSXV: CGP), an Ottawa, Ont.-based prospect generator that owns 15% in SolGold’s Cascabel copper-gold project in northeastern Ecuador, has joined forces with Ecuadorian state mining company ENAMI to explore 620 sq. km of land concessions east and southwest of Cascabel. The partners chose the properties based on public and proprietary data that reveal geochemical and geophysical anomalies similar to those seen at Cascabel and typical of porphyry and epithermal mineralized systems.

3. DYNASTY METALS & MINING

After months of financial hardship that prompted a corporate overhaul last September, Dynasty Metals & Mining (TSX: DMM; US-OTC: DMMIF) appears to be making progress at its flagship Zaruma gold mine in southern Ecuador. The company is looking at small-scale mining at Zaruma, targeting a production rate of only 100 tonnes per day in the first quarter this year. Dynasty is also open-pit mining 3- to 10-metre-wide veins at its Goldfields project in southwestern Ecuador. The veins are expected to deliver grades between 3 and 4 grams gold.

Dynasty Metals & Mining’s Zaruma gold mine in southern Ecuador. Credit: Dynasty Metals & Mining.

4. LUNDIN GOLD

Lundin Gold’s (TSX: LUG; US-OTC: FTMNF) 4.8 million oz. gold Fruta del Norte gold project in southeastern Ecuador is advancing towards development. In February, Lundin awarded a mine development contract to a consortium of companies, and construction of mine portals is is underway. The company signed an exploitation agreement with the Ecuadorian government last December, with Lundin paying the government US$25 million, with another two disbursements of US$20 million on the first and second anniversaries of signing. The government will also receive a royalty equal to 5% of net smelter revenues from production. 

5. INV METALS

A feasibility study is underway at INV Metals’ (TSX: INV; US-OTC: ILNLF) Loma Larga gold project in southern Ecuador, now that the company closed a $27.6-million bought-deal financing in March. The company intends to use the proceeds to initiate long-lead items to support the study, as well as launch a drill program aimed at increasing the size of the deposit, and explore for more satellite deposits on the property. A prefeasibility study completed last year envisages a 3,000-tonne-per-day operation that could deliver a 26.3% after-tax initial rate of return and a US$489.9-million pre-tax net present value, assuming a 5% discount rate.

6. LUMINA GOLD

Ross Beaty-linked Lumina Gold (TSXV: LUM) has started a 12,000-metre drill program at its Cangrejos gold-copper project in southern Ecuador, with the aim of upgrading the deposit’s inferred resource of 191.8 million tonnes of 0.81 gram gold into indicated. The company is also generating targets on 13 new concessions totalling 407 square kilometres, located along trend of its existing Condor gold project, near Lundin Gold’s Fruta del Norte project, and SolGold’s Cascabel project.

Drillers at Lumina Gold’s Cangrejos gold-copper project in Ecuador. Credit: Lumina Gold.

7. SALAZAR RESOURCES

A 10,000-metre drilling program designed to expand Salazar Resources’ (TSXV: SRL) El Domo polymetallic deposit in central-west Ecuador has returned an intercept of 14.4 metres of 2.65 grams gold, 10.6 grams silver per tonne, 1.3% copper and 6.6% zinc. The hole was collared 240 metres east of El Domo, which is a volcanogenic massive sulphide deposit with 6.1 million indicated tonnes of 2.3% copper, 3.1% zinc, 0.3% lead, 3 grams gold and 55.8 grams silver.

8. SOLGOLD

Drilling at SolGold’s (LON-AIM: SOLG; US-OTC: SLGGF) Cascabel property in northeastern Ecuador continues to grow the footprint of the world-class Alpala copper-gold deposit and neighbouring targets, Alpala Northwest, Hematite Hill and Alpala Southeast. At Hematite Hill, the company recently intercepted 844 metres of 0.7% copper and 0.43 gram gold per tonne in a hole located 150 metres from Alpala Central. Whereas drilling at Alpala Central has lifted the high-grade core of the deposit 200 metres closer to surface, with drill results of 730 metres of 0.5% copper and 0.23 gram gold from 446 metres deep. Ground magnetic surveys have been completed, and crews are being mobilized to complete detailed Orion-Spartan 3-D induced polarization geophysical surveys across much of the property.

SolGold exploration manager Jason Ward (left) looks on as chief technical advisor Steve Garwin examines a sample from the Cascabel gold-copper project in Ecuador. Credit: Solgold.

9. TOACHI MINING

Toronto-based Toachi Mining (TSXV: TIM) has intercepted 6.3 metres of 7.12 grams gold, 24 grams silver, 8.8% copper, 1.6% zinc and 0.4% lead in drilling at its gold-rich La Plata volcanogenic massive sulphide project in north-central Ecuador. The program is designed to validate the historical drilling database of La Plata, and infill and expand known resources leading to a maiden resource estimate later this year. Previous operators estimated that La Plata contained a historical resource of 914,000 inferred tonnes of 8.01 grams gold, 88.3 grams silver, 5% copper, 6.7% zinc and 0.8% lead. The property contains more than 14 VMS exploration targets across 9 km. Toachi can earn between 60% and 75% interest of the project from a private Ecuadorian company.

10. TREK MINING

In January, Vancouver-based gold miner Trek Mining (TSXV: TREK) was granted three more claims at its Warintza copper-molybdenum porphyry project in southeastern Ecuador. The claims, which cover 126 sq. km, are prospective for similar mineralization styles, and cover enough ground for future mine development. The company plans to conduct social licence and permitting this year to establish an exploration program that includes the areas covered by the new claims. Trek is already producing gold at its Koricancha mill in Peru and expects a first gold pour from its Aurizona gold mine in Brazil by the end of 2018. TNM