In general, a number of historic moments in the development of small metallic mining in Ecuador have been identified. The emergence of small mining took place towards the end of the 70's as a result of the bankruptcy of the Compania Industrial Minera Asociada - CIMA - (a mixed capital company, private and public) that exploited gold in the south of Ecuador, in the Portovelo-Zaruma area, after the South American Development Company - SADCO left the country around the middle of the 20th Century.
The Zaruma-Portovelo gold mining camp has been worked since at least the Incan period, and is estimated to have produced five million ounces of gold and more than 12 million ounces of silver during the past one hundred years. The vein district extends over a strike distance of approximately 16 km and has a width of up to 4 km. The most important gold producer in the camp was the South American Development Company ("SADCO") which produced 3.5 million oz of gold and 17 million oz of silver from 1904 to 1950. Mining in the former SADCO area has continued since that date with one Ecuadorian company and other smaller groups estimated to have produced a further 1.5 million oz of gold.
On January 29, 2009, after having gone through a review, amendment, and approval process, which included input from Ecuador’s President, the country’s National Assembly passed the new Mines Law (2009 Law). Under the new law, exploration was to be characterized as initial or advanced. The initial stage would last for 4 years and there would be an opportunity to apply for two 2-year extensions in the advanced stage. No limit was established as to how many concessions a concessionaire could hold during the exploration stage, but no single concession was to exceed 5,000 hectares during the exploration and exploitation stages. Upon completion of the initial exploration, the concessionaire would be required to reduce the concession size, with a further reduction following advanced exploration, to satisfy yet-to-be-determined guidelines. Concessionaires would be required to negotiate exploitation contracts with the Government on a case-by-case basis and to submit environmental impact studies to obtain permits.
Sixty percent of the royalties earned from mining were to be earmarked for productive sustainable local development projects. In certain (unspecified) cases, 50% of that amount could be directed towards the governmental bodies of the indigenous communities or territorial constituencies. Funds would be prioritized to meet the needs of the communities directly affected by mining activities.