Country Profile: Ecuador
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Despite Ecuador’s metallic mineral wealth dating to before the Inca
Empire (600 B.C. to 400 A.D.), its riches were a mere myth until 2007
when Aurelian Resources discovered 13.7 million oz. of gold and 22.4
million oz. of silver in inferred resources at its Fruta del Norte
The “gold dinosaur,” as FDN
was known in the industry, attracted the most important gold producers
in the world, including Barrick and Newmont, and was eventually
acquired by Kinross Gold Corp. last September 2008. The deal was the
largest private transaction ever completed in Ecuador.
gold and silver, Ecuador also possesses tremendous copper deposits.
Corriente Resources’ copper-gold Mirador project, for instance, has
resources of 11 billion pounds of copper, in a camp located alongside FDN in the southeastern Cordillera del Condor. Both FDN
and Mirador are the two most advanced exploration development projects
in Ecuador, the latter possessing an approved government feasibility
As a result, Kinross and Corriente will become
pioneers in developing a responsible and sustainable mining industry in
the only Latin American country with no large-scale mining operations
when the country unveils its new mining law, expected in January 2009.
spite of Ecuador’s recent discoveries and galloping metallic mineral
prices, junior mining companies operating there suffered a setback in
April when the Constituent Assembly, a temporary legislature, issued a
mining mandate halting all mining activities until the new mining law
The harsh move sought to expel land
speculators – including former mining authorities’ relatives – who held
hundreds of mining concessions for easy profit. The decision also
slashed foreign firms’ market capitalisations and in some cases
threatened their cash flows, forcing them to sell assets or consider
friendlier jurisdictions to diversify their portfolios and calm jittery
This scenario, however, will change in 2009 when the new mining law is approved and firms operate again.