Ecuador Mining Project Update
Ecuador is considered relatively untapped in terms of exploration. With only 10% of the country explored, Ecuador has incredible potential due to its location at the northern end of the Andes Mountain range. Ecuador is estimated to have sizeable reserves in numerous minerals but it is gaining a reputation for its world-class copper and gold deposits.
The Ecuadorian Mines and Energy Ministry recently said that the government expects to generate over $4 billion in annual mining exports by 2025 with 4 new operations coming into operation before the end of President Guillermo Lasso’s term in 2025, including the Cascabel project, held by Australia’s SolGold.
Although there is a lot of excitement, the road to becoming a full-fledged mining jurisdiction is still not guaranteed. The country is facing challenges from environmentalist, lack of clear environmental regulations, permitting, and illegal mining.
Below is an overview of the most recent updates on the development of Ecuador’s mining sector.
Current Projects
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Fruta del Norte |
Lundin Gold is the owner of Fruta del Norte, an underground gold-silver mine in that had its first full year of operations in 2021. Fruta del Norte is considered one of the biggest gold discoveries of the last 50 years. For 2024, production guidance is 450,000-500,000oz. Based on the new figures, it now expects to produce almost 4.8 million ounces of gold at Fruta del Norte over a 14-year mine life. |
Fruta del Norte plans to invest US$36 million to expand the plant’s processing capacity to 5,000t/d by the end of this year. The project to increase plant throughput to 5,000 tpd by the end of 2024 and improve metallurgical recoveries with the addition of three Jameson cells Based on positive results to date, the company is increasing its near-mine drilling program by 10,000m, bringing the total regional and near-mine exploration program to 66,000m. The new drilling would increase the cost of the 2024 exploration program by US$2mn to US$44mn. Most of the drilling is being done at Bonza Sur, which is located 1km from the Fruta del Norte mine and is being delineated as a new gold deposit. A maiden mineral resource estimate is expected in the first half of 2025. |
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Mirador
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Mirador is a large-scale, open-pit, copper-gold project that went into production in 2019. The project contains 3.2 million tonnes (Mt) of copper, 3.4 million ounces (Moz) of gold, and 27.1Moz of silver in proven and probable reserves. The current mining and processing production scale is 20 Mt of ore processed per year, with 60,000 t daily. The annual output of copper concentrate will be 354,000 t and the amount of copper metal 96,000 t. |
Plans to invest US$196 million in the remainder of 2024 as it develops Mirador phase II. Work includes building interceptor channels, access roads and equipping the Mirador Phase II beneficiation plant The second phase involves increasing ore production from the current Mirador I (south) deposit to 80,000t/d and developing the Mirador Nortg deposit, which will produce an additonal 60,000t/d, bringing output from the new development to 140,000t/d by 2028. In the first half of 2024, EcuaCorriente invested US$104mn in access roads, civil engineering for the processing plant and acquisition of major equipment, among other items. Last year the company invested US$88.5mn in equipment, environmental engineering and environmental management. By 2026, production will begin to rise with the additional output from Mirador phase II in the second half of that year, reaching 687,000t. |
Projects Advancing
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Curipamba |
Owned by Adventus Mining and Salazar Resources, Curipamba is an open-pit copper-gold mining operation with proven and probable mineral reserves of 6.47 million tonnes (Mt) grading 2.52g/t gold (Au), 1.93% copper (Cu), 45.69g/t silver (Ag), 0.25% lead (Pb) and 2.49% zinc (Zn). The Feasibility Study shows that Curipamba can be a low-cost supplier of copper gold and zinc. Cash cost of US$1.14/lb and AISC of US$1.26/lb copper equivalent. Construction of the Curipamba mine is expected to start in 2024. The mine is estimated to require an investment of USD$248m. The feasibility study completed suggest an open pit mine that will produce 10,500t/y of copper annually during its first decade before operations move underground. There are sizable underground reserves that will increase the life of the mine. The company recently signed an Investment Contract with the Ecuadorian government that grants several incentives, such as reductions in income tax, exemption of import duties, tax stability, among others, that will last until March 2033. |
The project has recently received all permits it needs to start construction. In June, Ecuador’s environment ministry has granted a water use permit. In July, the Ministry of Energy and Mines issued a Resolution of Change of Phase for the project. The Resolution advances the legal status of the project from the economic evaluation phase to the exploitation phase and allows for the start of construction and subsequent operation of the mine A lawsuit was filed in June by around 30 residents of three rural communities in Las Naves canton backed by a human rights organization, demanding the court nullify the environmental impact study and revoke the environmental license, without which construction could not start. In July, a judge dismissed the legal action that sought to stop the construction. Construction is expected to start before the end of 2024 making this the third major project to be built in Ecuador. |
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Cascabel |
Alpala is the largest deposit found at the Cascabel concession and could become the largest underground silver mine, third-largest gold and the sixth-largest copper in the world. Cascabel will be developed in phases, with an initial price tag of $1.55-billion. The Phase 1 block cave will achieve a production rate of 12-million tonnes a year, extracting high-grade ore of about 1.45% copper-equivalent for the first ten years of production. In the second phase, the mining operations will be expanded by an additional 12-million tonnes a year, increasing the yearly production rate to 24-million tonnes in year six. Over an initial 28-year mine life, Cascabel will produce 4.3-million tonnes of copper equivalent, comprising 2.9-million tonnes of copper, 6.9-million ounces of gold and 18.4-million ounces of silver |
The company has inked an exploitation contract with the government which provides it with an investment guerentee, a stable tax rate fo 20% for 20 years, variable royalty on net smelter revenues, and an upfront USD$100m royality payment. Solgold has already made headway with financing the project. The company secured a USD$$750m gold streaming financing package which will be used towards project development (USD$100m) and the rest towards the construction (USD$650m). The company plans to initiate the next phase of project advancement immediately, focusing on geotechnical drilling of the tailings storage facility, additional metallurgical testing, reserves definition at the Tandayama-Ameríca deposit, hydroelectric power opportunities, plant location, and mine site design and layout, as well as securing necessary land access rights for infrastructure and commencing work on the feasibility study. The company plans to conclude the feasibility study in mid-2025 and that construction would begin in the second half of 2026, if environmental permitting goes as planned. |
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La Plata |
La Plata, owned by Atico mining, is a high-grade gold-rich VMS deposit which supported a small scale mine operation from 1975-1981 La Plata inferred resources at 1.9 million tons at an average grade of 4.1 g/t Au, 49.4g/t silver, 3.3% Cu, 4.5% Zn, 0.6% Pb For 2022, Atico is focused on completing the Feasibility Study, the Environmental Impact Study, and obtaining the necessary permits and licenses to begin construction of the La Plata project. The company recently received approval of the environmental impact assessment (EIA) for the construction, operation, maintenance and closure of the 69-kilovolt powerline and substation required for its project. The Project has been identified by the Government of Ecuador as one of the next mining operations and also included in its economic recovery plan. La Plata will require an investment of USD$176m. The project consists of a 900 tpd underground mining operation and processed with a state-of-the-art flotation plant while using the latest filtered tailing technology to mitigate its environmental footprint. In addition, the project will need infrastructure upgrades such as new access road and a 69kV powerline. Preconstruction could start in late 2023 |
Atico Mining has completed its feasibility study for the La Plata copper-gold project. The total capital cost, including VAT, is estimated at US$138 million. Key highlights of the feasibility study include an annual production capacity of 310,250 tonnes, with anticipated average annual production figures of 9.71 million pounds of copper, 15,929 ounces of gold, 226,299 ounces of silver, and 13.25 million pounds of copper in concentrates over an 8.1-year mine life. The project spans 2,300 ha and boasts initial probable reserves of 2.51 million tonnes. The average grade is 1.59% copper, 2.28 g/t gold, 30.41 g/t silver, and 2.18% zinc. The company is waiting to recommence the environmental consultation process which had been stopped by a lawsuit. Company exectuives hope that they will have the environmental license by December 2024. |
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Loma Larg |
Loma Larga is an underground gold-copper-silver project located in the Azuay province of Ecuador. The Loma Larga project is expected to produce 139,958 ounces (oz) of gold, 794,561oz of silver and 5.1 million pounds (Mlb) of copper annually over an estimated mine life of 12 years. The initial mining operation is expected to be at the rate of 3,000 tonnes per day (tpd), which will be increased to 3,400tpd from the fifth year. The underground mine will be accessed through a 1.2km ramp, which will also be used for hauling waste and ore as well as for ventilation purposes. Ore will be transported 3.5km from the portal to the process facilities where it will be go through two stages of crushing – primary and secondary, followed by single-stage ball milling. The project currently has complications due to a popular consultation that took place in 2021 which prohibited mining near water sources. The company maintains that it is not located and is going through judicial procedures so that construction and further exploration can advance. A decision should come in 2023. |
Ready for construction but the State is requireing the company to carry out environmental consultation and prior consultation with local communities before it can request the environmental permit to allow construction to begin. Very little news in 2024 as the company is working through enviromental consultations but Dundee continues to work on the optimization phase of the feasibility study. |
Conclusion
Ecuador has done a great job of creating a mining industry that could create long term value for the country. It has not been easy with only 2 mines built to date. With that being said, there is a large project pipeline advancing, although some our facing opposition from communities.
In recent months though, Ecuador’s mining sector has had positive news with projects starting to advance as they have overcome obstacles but there is still a long road ahead.
There is still significant work that needs to be done by both the government and private industry to overcome some of the challenges around permitting and community opposition.
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