Page 1

Ecuador

Mining Catalog


Scan QR for mining video:

https://www.youtube.com/watch?v=-84hsbYHV_g


Ecuador Mining Catalog

Message from the Minister of Mining The Ecuadorian mining sector is undergoing a moment of strengthening, focusing on a prominent future. This is fundamentally due to the firm political decision of the National Government to transform mining, not only into a source of revenues for the national treasury, but also into a dynamic sector that significantly enhances local and national economies, generating a common benefit for citizens. The development of mining industrial in Ecuador is one of the main priorities of our strategic sectors. Evidence of this was the decision taken last year to create a specific Ministry for the mining sector. This positive change guarantees an agile institutional structure that is at the service of entrepreneurs and citizens. In this context, opportunities for progress and investment in Ecuador are based on three essential pillars that position it as a new hub for development of the mining industry in the region: 1) the great mining potential to be explored, 2) a strong commitment to the sector and the political stability of the National Government and, 3) the competitive advantages offered to investments in the sector. All these have generated a climate of confidence for national and foreign investment. This Mining Cataloge becomes a very useful informative tool for the investor. The relevance of the geological potential Ecuador possesses is reflected both in the projects that are under development, as well as in those areas that represent opportunities to reactivate exploration in the country. Its also outlines the comparative advantages that we have to attract foreign investment, basically related to operating costs and the access to indispensable resources for the development of mining projects. We are striving to stand out in the region as a new destination for mining investment and, in this sense, our commitment to investors is further bolstered by a strategy for public-private partnerships that has emerged through legal and tax reforms to promote the injection of the new capital for the development of the industry. To this we must add the financial stability provided by a dollarized monetary system. Without further preamble, I invite you to discover the geologic potential of Ecuador, a new mining destination in Latin America.

Javier Cรณrdova Unda Minister of Mining 01


Ecuador Mining Catalog

Content

02

I.

The importance of mining in Ecuador

II.

Advantages of mining in Ecuador

III.

Project status

IV.

Investing in Ecuador


Ecuador Mining Catalog

I. The importance of mining in Ecuador Mining is recognized as a key strategic sector for the country

00


Ecuador Mining Catalog

The foundations of a new pillar of the economy The objective of the Ecuadorian government is to transform the mining sector into a pillar of the economy in the next 5-10 years. To achieve this, the government is making meaningful positive changes in the sector: it has approved numerous fiscal and legal reforms to improve the country's competitiveness; also, to reinforce the government’s commitment to the mining sector, the Ministry of Mining has been elevated (previously a sub-ministry), giving it greater voice to the needs of the mining sector in the government and greater capacity to support development of the mining industry.

The new Ministry of Mining In 2015, the Ministry of Mining was created in order to incentivize and accelerate the development of the sector. This change is already resulting in increased momentum and significant advancements in key mining projects and administrative processes.

As an official "strategic sector", the Ministry of Mining benefits from the support of the highly influential Coordinating Ministry of Strategic Sectors (MICSE). The MICSE directs and ensures cooperation of the other ministries that oversee key issues of the mining sector, such as water, fuel, electricity, and environmental permitting. With MICSE support, the Ministry can greatly simplify and streamline companies' interactions with the government and facilitate the resolution of any concerns. 04


Ecuador Mining Catalog

The ministry manages additional mining-related institutions

National Mining Company of Ecuador Explores and develops mining projects through partnerships and ventures with private mining companies, to contribute to the economic development and the advancement of mining capability in Ecuador.

Agency for Mining Regulation and Control Issues, administers, and extends mining rights and concessions to ensure that this activity is carried out in a legally, technically, and socially responsible manner.

National Institute of Geological, Mining and Metallurgical Research Performs geological studies and searches for new mineral deposits, with a technical and scientific perspective. 05


Ecuador Mining Catalog

II. Advantages of mining in Ecuador Ecuador's mining sector offers valuable advantages for investors interested in Latin America


Ecuador Mining Catalog

High quality mineral deposits Ecuador Geological Map

Scan QR High resolution maps:

http://visor.geoinvestigacion.gob.ec/areas_mineras/

07


Ecuador Mining Catalog

Exceptional geology Ecuador is a country with great exploration opportunities Only about 5- 10% of the land area has been explored, resulting in significant potential for major new discoveries of gold, copper and other metals in the mineral-rich Andes mountains.

Potential for low stripping ratios Because its mineral wealth is less exploited to date, Ecuador features many deposits with low stripping ratios compared to recent projects in neighboring countries.

Diversity of minerals Ecuador has deposits of numerous minerals, including Au, Cu, Ag, Mo, Th, Ba, U, Ce, W, Nb, Sn and Pb.

Potential for high grades Current projects demonstrate the potential to discover higher grades than have be found in other recent projects in Latin America.

Current copper grades 1.3%

Ecuador has some of the highest grade copper projects in the region

Ecuador Chile Peru

0.6% 0.6% 0.6% 0.5% 0.5% 0.5%

08

Caserones

Antucoya

0.4% 0.4% 0.3% Constancia

Quadra

Toromocho

Blanca

Galeno

Panantza

Mirador

Las Bambas

Mina Justa

0.4%


Ecuador Mining Catalog

World class infrastructure

The Ecuadorian government has invested US$30.4 billion in strategic sectors in the last 8 years. This investment has provided the country with world class infrastructure.

Government investment in strategic sectors (USD billions) 0.4 e $3 v i t ula Cum

$1,1 $1.1

$2.3 $2,3

$2.8 $2,8

$2,8 $2.8

$3.5 $3,5

$4.3 $4,3

2007

2008

2009

2010

2011

2012

$6.4 $6,4

$7.1 $7,1

2013

2014

These infrastructure investments provide tangible benefits to the mining sector, as for many projects they can reduce capital costs, operating costs, and development times to improve project economics.

Energy

Water

8,300 MW USD 6.6 billion investment 3.5 GW of new capacity %

Highways USD 8.2 billion investment

USD 1.5 billion investment

Clean Energy

Ports

Airports

USD 20 million investment

USD 350 million investment

09


Ecuador Mining Catalog

Infrastructure Energy and water

Ecuador has ten hydroelectric projects currently under construction 8,300 MW of installed capacity is expected by 2016 With the additional capacity, Ecuador’s power generation is anticipated to exceed domestic demand

Coca Codo Sinclair USD 2,581MM

Manduríacu

Toachi Pilatón

USD 227 MM

USD 480 MM

Mazar Dudas USD 83 MM

Minas San Francisco

Quijos

USD 589 MM

USD 156 MM Sopladora USD 963 MM

Delsitanisagua USD 335 MM

10


Ecuador Mining Catalog

Infrastructure

Highways, ports, airports Over 8.2 billion USD was invested between 2007 and 2015 in roads alone, improving 89% of roads in throughout the country.

10,000 Km of new improved high quality highways.

5 main ports evenly distributed along the coast.

15 airports being built/updated throughout the country.

11


Ecuador Mining Catalog

Competitive operating costs

Competitive advantages in several key mining costs, complemented by exceptional geology, provide real operational advantages Ecuador features several prominent gold and copper projects that are projected to be in the first quartile of global cost curves, demonstrating the impact of Ecuador's advantages versus its regional peers.

Global Operating Cost Curve, 2020 – Gold Long term price $1.350/oz

USD/oz

1,500 Loma Larga 165 Fruta del Norte 293

1,000

Chile: Latest projects Peru: Latest projects Ecuador projects Others

500 0 0

500

1,000

1,500

• Gold and copper project expected to be 1st Quartile

• Operating costs much

Global Operating Cost Curve, 2020 – Copper

USD ¢/lb

400

Mirador Llurimagua Panantza

300 200

lower than regional peers

Long term price ¢350/lb

80 84 89

100 0 0

12

10,000

20,000

Note: This analysis only includes operational cost of mine . Source: Wood Mackenzie

30,000

40,000

• Competitive advantage in 40% of operating costs: o Work force o Electricity o Fuel o Freight


Ecuador Mining Catalog

Fiscal regime: Incentives and reforms

The government is taking concrete steps to make the fiscal regime more competitive

Fiscal stability contracts

Fiscal stability contracts applicable to investments of all sizes (no minimum investment guidelines) Protects against future changes to income tax, VAT, and currency exportation tax

Accelerated depreciation

Investor’s choice to accept accelerated depreciation Investors choosing accelerated depreciation can select a period of 5-10 years

VAT refunds starting in 2018

VAT will be refundable for mineral exports Significant positive impact on IRR of projects

Exemptions from currency exportation tax

Equipment specific to the mining sector is now exempt from the currency exportation tax

Capital gains tax restricted

Places limits on the transactions that can be taxed, to ensure that only substantial transfers of ownership trigger the tax

Foreign investment allowed in small mining Other taxes

Foreign companies are now permitted to invest in small Ecuadorian mines

New rules have rendered certain additional taxes inapplicable (sovereign adjustment and extraordinary gains tax) until the company has recovered its investment 13


Ecuador Mining Catalog

III. Projects status


Ecuador Mining Catalog

18 major discoveries

Under evaluation and development private projects

Of these 18 projects, the first five are sufficiently advanced to achieve "strategic project" status, which qualifies them for additional government emphasis and support.

Legend

Strategic

The other projects are anticipated to move forward in the medium term.

14 13

6

18

Private

17

9

4

3

Enami

7 15 16

8 5 1 2 11

12 10

Strategic

Private

Enami

Project

Company

Metal

1

Mirador

Tongling

Copper

2

Fruta del Norte

Lundin Gold

Gold

3

RĂ­o Blanco

Junefield

Gold

4

Loma Larga

INV Metals

Gold

5

San Carlos Panantza

Tongling

Copper

6

Cascabel

SolGold, Cornerstone

Gold / Copper

7

Curipamba

Salazar Resources

Gold / Silver

8

Warintza

Lowell Copper

Gold

9

Chaucha

Southern Copper

Copper

10

Condor Gold

Ecuador Gold and Copper

Gold

11

RĂ­o Zarza

Eco Metals

Gold / Copper

12

Cangrejos

Odin Mining

Gold / Copper

13

Llurimagua

Enami y Codelco

Copper/ Molybdenum

14

Tola Norte

Enami

Iron / Titanium

15

Telimbela

Enami

16

El Torneado

Enami

17

Pacto

Enami

Gold

18

La Bonita

Enami

Gold / Copper

Copper/ Molybdenum Copper/ Molybdenum

Note: Enami is the National Mining Company Source: Ministry of Mining, Wood Mackenzie

15


Ecuador Mining Catalog

Five strategic projects

Selected advancements in strategic projects

Loma Larga 4

3 RĂ­o Blanco 5 Panantza

Mirador 1

Fruta del Norte 2

16


Cu

Au

Ag

Au

Ag

Ecuador Mining Catalog

Mirador

Mine construction began in 2015. First production expected in 2018

COPPER

Measured and indicated resources

GOLD

SILVER

3.2 m oz

2.96 million tons

26.08 million ounces

US$ 1.500 millions

Estimated investment

Mine construction

Status

Fruta del Norte One of the world's premier undeveloped gold deposits Key exploitation contract terms already negotiated as part of a precontractual agreement signed in January 2016

GOLD

Probable reserves Estimated investment Status

4.82 million ounces

SILVER

6.34 million ounces US$ 960 million

Operational Phase / contract negotiation

17


Ecuador Mining Catalog

RĂ­o Blanco

Au

Ag

Au

Ag

Cu

Cu

Mo

Ag

Mine construction to begin in 2016 GOLD

Reserve

SILVER

605 k oz

4.3 m oz US$ 88.8 million

Estimated investment

Exploitation-Mine construction

Status

Loma Larga Pre-feasibility study completed in 2015 GOLD

Probable reserve

1.135 million ounces

Estimated investment Status

SILVER

5.68 million ounces

Advanced exploration

Projected annual copper production of over 400 million pounds COPPER

Estimated investment Status

18

21.10 tons

US$ 244 million

San Carlos - Panantza

Resources

COPPER

6.6 million tons US$ 3 billion Advanced exploration


Opportunities for exploration and participation in new projects

Ecuador Mining Catalog

IV. Investing in Ecuador


Ecuador Mining Catalog

How to invest: 2 ways 1. Invest in existing state-owned projects Partnering with ENAMI

The National Mining Company (ENAMI) is seeking partners to develop and operate its portfolio of projects. These projects represent the most advanced new exploration opportunities in terms of data availability. Coldelco is partnering with ENAMI for the exploration, evaluation, development and operation of the Llurimagua copper project, and similar partnerships with private companies are possible for the five other projects under a variety of potential structures. Partnering with ENAMI provides a streamlined entry into the Ecuadorian market, and provides private sector partners with benefits and support normally reserved for state-owned entities. The process of associating with ENAMI is flexible, with the basic process defined as follows:

Start of process

Confidentiality agreement

Partnership process Multiple structures can be pursued. Alternatives may be considered. The most common structures are: - Strategic Alliance: Flexible, ENAMI EP share usually 10 - 50 % - Private/Public Company: ENAMI EP stake 51 % - Joint Venture

Company qualification requirements include: Demonstrated knowledge, capacity, and experience in the mining sector Solvency 20

Negotiation: Proposal Counterproposal Negotiations

Approval by ENAMI Board of Directors

Authorization of the General Manager to sign the partnership agreement


Imbabura province

Cu

Ecuador Mining Catalog

Llurimagua

Partnership with Codelco

Mo

Resource

318 million metric tons

Area

4,839 ha

Phase

Advanced exploration

Tola Norte

Esmeraldas province

Fe

Ti

Resource

1035 million metric tons

Area

4,648 ha

Phase

Advanced exploration

21


Ecuador Mining Catalog

Telimbela

BolĂ­var province

Cu

Mo

Potential

Drilling of 4,000 m. over the anomaly of Ashcoaca. Several sections in the drilling TEL-06 of up to 20 m with 0.9% Cu, several sections with 27 m with 1.1% Cu

Area

4,033 ha

Phase

Advanced exploration

El Torneado BolĂ­var province

Cu

22

Mo

Potential

0.5% Cu, 69% Zn in 2150 Ha (Concesion El Cristal, Gualazay, Gero, Greenfield, Chiledona)

Area

17,878 ha

Phase

Advanced exploration


Ecuador Mining Catalog

Pacto

Pichincha province

Au

Potential

350,000 ounces Au El Viudo Sector 50,000 ounces Au La Victoria Sector

Area

4,645 ha

Phase

Advanced exploration

La Bonita

Sucumbios province

Au

Cu

Potential

Geochemistry of fluvial sediments, soils and rock, exhibit anomalies of interest in the Rosa Florida Concession. There is evidence of free gold in the pan.

Area

13,590 ha

Phase

Initial exploration

23


Ecuador Mining Catalog

How to invest: 2 ways 2. Obtain a new mining concession Companies may request multiple mining concessions of up to 5,000 hectares each in available areas, according to the new process established in February 2016, which is summarized on the following page. The Ministry of Mining may initiate its own auctions of additional concessions with known potential from time to time, depending on market conditions. These auctions will be publicized internationally prior to launch. - 2A. Process to obtain a new mining concession - 2B. Available areas and existing mining concessions

Many additional projects are being developed by companies listed on the TSX, ASX, LON, NYSE and other stock markets. In addition, Ecuador has over 100 privately-owned medium scale and small mines in the exploration and exploitation phases, some of which may represent larger-scale opportunities with additional study and investment.

24


Ecuador Mining Catalog

2A. Process to obtain a new mining concession

Interested parties may now request new mining concessions via a simple, fast and transparent process Mining Concession Request Process

Prospecting

1

2

Concession request submitted

Prequalification

3

4

Concession posted to website Legend

Submission of proposal(s) (confidential)

5 Evaluation of proposal(s)

Interested Party

6

Swiss Challenge option to match

7

Concession awarded to successful bidder

Exploration and submission of required reports

Ministry of Mining

Prospecting is free, and available to all as established by Ecuadorian law. Existing public information and real-time availability of potential mining concessions is viewable on the internet, for free, at http://visor.geoinvestigacion.gob.ec/areas_mineras

1

Once an interested company or individual has identified a desired mining concession, it may submit a formal request to the Ministry of Mining. Such requests must include at least:

4

a. A work plan detailing exploration plans and expenditure commitments

a. Concession reservation obtained from ARCOM. More information www.arcom.gob.ec b. Documentation proving that the requesting individual or company meets the prequalification criteria of the concession granting process: i. Domicile and good standing in Ecuador. ii. Minimum financial solvency requirements

2 3

The Ministry and its institutions verify compliance with the pre-requisites, and notify the company of successful initiation of the concession granting process.

The Ministry posts the concession request on its website www.mineria.gob.ec, for a period of three weeks, to allow for competing proposals for the mining concession in accordance with Ecuadorian law. All bids must also demonstrate compliance with the pre-qualification criteria.

The interested party and competing bidders, if any, submit confidential proposals, which will not be opened until all proposals are evaluated. The proposals includes:

b. Previous experience of the company and/or team

5

All proposals will be evaluated according to the standard terms of reference posted on the Ministry's website. Because potential mining concessions in Ecuador are generally very early stage, scoring is primarily based on the amount to be invested in exploration of the concession.

6

The evaluation is run as a typical Swiss Challenge, permitting the party who originated the process to enhance its proposal by increasing the investment commitment by up to 100% of its original value to match a competing bid.

7

The concession is awarded to the party that submitted the winning proposal. Competing bids are not required; in the event that no competing bids are received, the concession will be awarded to the initiating party.

The concessionaire must submit required reports each year to demonstrate meaningful exploration activity, evidenced by fulfillment of the investment plan commitment from the concession granting process and the technical results of the investment programs. 25


Ecuador Mining Catalog

2B. Available areas and existing mining concessions

Ecuador's geoportal provides instantaneous, free access to the mining cadaster shown here. The interactive live map, updated in real time, also provides access to public geological, geochemical, and geophysical results and proximity to key infrastructure to facilitate companies' identification of prospecting opportunities.

PACIFIC OCEAN

Mineral potential ranges from gold and copper to less common metals (e.g. uranium) Low level of exploration in the country means potential for additional discoveries

It can be accessed at the following URL:

Legend Cities Concessions In process Registered Granted Notarized

http://visor.geoinvestigacion.gob.ec/areas_mineras

26


Ecuador Mining Catalog  

Ecuador a new mining destination in Latin America

Read more
Read more
Similar to
Popular now
Just for you