Exploration To Resume In Ecuador

Junior explorer Cornerstone Capital Resources (CGP-V, CTNXFO) says the government of Ecuador has confirmed that regulations to its new mining law will be approved on Nov. 4, after which exploration can resume.

The news sent Cornerstone shares up 40% to 14¢.

Cornerstone said Ecuador’s Vice-Minister of Strategic Sectors, Luis Roman, and Vice-Minister of Non-Renewable Natural Resources, Carolina Bernal, made the announcement during a meeting with mining companies in Toronto on Oct. 15. Both officials were part of an Ecuadorian delegation that met with government officials in Ottawa the previous day.

Ecuador’s new mining law was approved in January but the regulations that are to be approved on Nov. 4 are necessary to administer the new law, Colin McKenzie, Cornerstone’s president and chief executive, explained in a telephone interview.

“There are draft versions of the regulations that have been circulating in Ecuador since last spring, but (now) it sounds as if they are committing to a date to have it done,” he said.

“Whether there was a way that they could have done it before — who knows? But it’s great to have the government give us this sort of self-imposed deadline — it seems to give us a little more certainty that it will happen and that they are committed to make it happen.”

Cornerstone said the private meeting was convened by Kinross Gold (K-T) and other attendees included Iamgold (IMG-T), Corriente Resources (CTQ-T), Salazar Resources (SRL-V), and Dynasty Metals & Mining (DMM-T).

McKenzie adds that Cornerstone expects to soon receive approval from Ecuador’s Ministry of Environment of the environmental studies and updated environmental management plans the company has submitted for its projects in the country.

The development paves the way for Cornerstone to resume work on its properties and “will be the means to attract joint-venture partners to assist us in advancing these projects,” he said.

“President Correa has always been very firm that there would be responsible mining in the country but the administrative road to make it happen was not always clear.”

Cornerstone started exploring in Ecuador in 2005 and acquired four early stage gold projects Bella Maria, Monterrey/Cana Brava, Shyri and Macara [which it jointly holds with Newmont Mining (NMC-T, NEM-N)] and La Plata an advanced gold-rich VMS project.