Dynasty Metals & Mining Inc. owned 100% of three advanced-stage gold projects, including the Dynasty Goldfield, the Jerusalem, and the Zaruma projects, all located in southern Ecuador. Resource estimates at Dynasty Goldfield included 14,600 kg of measured resources, 16,800 kg of indicated, and 35,800 kg of inferred resources of gold. The Jerusalem deposit had an estimated 239,700 kg of measured resources, 10,700 kg of indicated resources, and 22,100 kg of inferred resources of gold. The Zaruma deposit had an estimated 680 kg of measured resources, 12,700 kg of indicated resources, and 43,000 kg of inferred resources of gold. The company also reported that the Zaruma deposit had 165,500 kg of measured resources, 216,800 kg of indicated resources, and 454,000 kg of inferred resources of silver. Dynasty predicted commissioning of the Zaruma gold plant in April 2009 (Dynasty Metals & Mining Inc., 2009).
As of June 30, International Minerals held a 100% interest in the Rio Blanco gold and silver property and between 55% and 100% interest in the concessions that make up the Gaby gold property, both of which were development-stage projects. In 2006, the reserve estimate for Rio Blanco included 18,800 kg of proven and probable reserves of gold and 134,000 kg of silver reserves. The Gaby project was on hold between 1997 and early 2006. As a result of rising gold prices, the company commenced a preliminary feasibility study in March 2006 that was completed in February 2008.
The combined measured and indicated resources were estimated to be approximately 194,100 kg of gold and 284,000 metric tons of copper. In March 2008, the company announced that it would purchase the remaining 50% interest in the Papa Grande deposit at Gaby, which would increase International Minerals’ measured and indicated resources for the Gaby project to an estimated 142,800 kg of contained gold from 117,600 kg of contained gold. It would also increase the inferred resources to 63,100 kg from 51,600 kg of contained gold (International Minerals, 2008).
IAMGOLD Corp. of Canada’s Quimsacocha project was an advanced exploration project. On July 29, the company released results of the prefeasibility study, which showed that during the first 3 years, Quimsacocha could produce an average of 7,000 kilograms per year (kg/yr) of gold and that over a projected mine life of 7.5 years, the current deposit would produce an average of 2,300 kg/yr of gold. A final feasibility study for Quimsacocha was expected to take approximately 12 months to complete after the necessary work permits were received, and the project was targeted to commence in the second half of 2010 with commercial production in 2012 (IAMGOLD Corp., 2009).
After nearly 2 years of legal uncertainties in Ecuador’s mining sector, the Government seems to have positioned itself to manage the exploration and exploitation of valuable mineral deposits within its territory. The cancellation of many mining concessions did effectively reduce the amount of land being held speculatively. Differing reports stated that those properties would be auctioned publicly, returned to the state, or be permitted to resume activities, but no specifics regarding the outcome for all the disputed concessions was readily available. When the Mining Mandate went into effect in April 2008, there was discussion about creating a new state-owned mining company that would monitor mining activities in the country
Several companies with advanced projects and long-term investments in the country seem prepared to negotiate with Ecuadorian officials to bring projects to the production stage, possibly before the end of 2009, and report confidence that, despite all the delays, business is likely to proceed in Ecuador with the full support of the Government. Opposition is present from environmental activists and local communities concerning the risk that the mining industry poses to the environment but the Government continues to advocate for the revenue that the exploitation of major new metal discoveries could bring to the nation.
Within 12 to 24 months, the Ecuadorian mining sector will likely begin to play a more significant role in the regional supply of metals and is likely to remain so for at least a decade after the commencement of production.