LATIN AMERICA SPECIAL — Ecuador’s copper attracts juniors

Ecuador’s copper deposits have attracted two Vancouver juniors, Kookaburra Resources (VSE) and AG Armeno Resources (VSE), which hope to establish a solvent extraction-electrowinning operation (SX-EW) in the south-central mountains.

Larger companies, including Cominco (TSE), Noranda (TSE) and Newmont Mining (NYSE) are also reportedly

exploring in the area for copper-porphyry systems and, in Noranda’s case, gold deposits on behalf of affiliate Hemlo Gold Mines (TSE). In May, 1991, Ecuador introduced a new mining law more favorable to foreign investors. Whereas the previous law was ambiguous, the new law guarantees the transition of rights from exploration to exploitation and commercial production.

The new regulations, including greater tax benefits, may help stimulate the country’s mining industry, which currently employs less than 1% of the workforce.

Under a joint venture, Kookaburra and Armeno recently outlined an estimated minable reserve of 60 million tons grading 0.46% copper with a strip ratio of 0.8-to-1 at the Chaucha copper project in Ecuador.

According to a recent technical and economic study on the deposit by Flour Daniel Wright, a 14,000-ton-per-day SX-EW operation would produce some 33 million lb. of copper cathode per year.

A higher-grade, near-surface zone containing more than 10 million tons grading 0.7% copper would be used to accelerate the payback of an estimated US$64.6 million in capital costs.

Kookaburra Gold President Rennie Blair says a half-ton sample from the Chaucha copper project has been sent to Tuscon, Ariz. for metallurgical testing. A new road that will pass through the Chaucha project on its way to the Pan American highway is currently under construction by the government. The new projects in Ecuador are focused on large intrusive-breccia complexes recently discovered in districts known for their vein-type gold mineralization.

The government of Ecuador is publishing a new geologic and metallogenic map of the country.