Miramar, Costa Rica — Sometimes, it takes a while. Thirty-five owners and 55 years after the first permits were issued,
With that, the junior gold producer more than doubles its annual production in a year when gold prices are flying high, and also draws a line under a long and sometimes difficult development history.
“Mining has been part of the roots of this town,” says Franz Ulloa Chaverri, head of Glencairn’s Costa Rican operation, gesturing at the coat of arms of the municipality of Montes de Oro. Industrial-scale gold mining started in the area in the 19th century, followed by a 5-year mining effort by wax and chemical producer S.C. Johnson before the First World War.
Local and overseas companies had worked on gold prospects from the 1950s, including some of the majors, but it was in the 1970s that Canadian juniors started to kick the Bellavista can. It was Minera Rayrock that did the most work, through to 1997, when it sold the project to Wheaton River Minerals. Wheaton, in turn, sold Bellavista to Glencairn in 2002 during Wheaton’s reorganization as a silver company.
What Glencairn inherited was a project that had been beset by economics, political and pressure-group opposition, and a long history of being not-quite-feasible. Minera Rayrock had taken Bellavista through a full feasibility study in 1996, then drawn back from production using a full-scale milling process. Wheaton, and subsequently Glencairn, re-engineered Bellavista as a heap-leach operation.
But what Rayrock had done — and carefully — was the geology, drilling about 37,000 metres in reverse-circulation and diamond drill holes. That gave later owners the luxury of knowing there was a resource of 21 million tonnes at 1.4 grams gold per tonne.
The Glencairn-Wheaton plan to produce through open-pit mining and heap leaching proved to be easier economics, especially in chopping capital costs. Glencairn brought Bellavista into production for US$35 million, considerably less than the US$50-million capital cost consultants for Rayrock estimated in 1990 — especially after inflation. Cash operating costs have been estimated at US$257 per oz.
Having found the deposit’s economic sweet spot, and jumped the regulatory hoops, there couldn’t be much more to do, could there?
Enter the anti-mining movement, a local opposition group with significant support from pressure groups in the First World. Opposition had been building from the Rayrock days, but it was Wheaton and then Glencairn that met a head-on challenge from a local group called CEUS del Golfo de Nicoya, led by Sonia Torres Arguedas, and backed by organizations like Mining Watch, the Canadian Committee to Combat Crimes against Humanity (CCCCH), and the California-based Inter-American Association for Environmental Defence.
The local opposition filed lawsuits, all ultimately dismissed, while the North American groups fought a publicity campaign against the project. That campaign reached an apex in 2004, when CCCCH accused Ulloa and Glencairn of bribing environmental regulators and politicians to get approval for Bellavista.
Apart from inventing the bribery story, the anti-mining groups also ignored the tight environmental planning at Bellavista. Water management, always an issue around heap-leach gold mines, was designed with a vengeance: the leach pads are built to discharge only after cyanide destruction, and extra detention capacity is designed to hold three times the runoff from the heaviest rain ever recorded in the area. (That capacity got its test in the record 2005 rainy season, without any trouble.)
When The Northern Miner visited recently, the “no to mining” signs had dwindled to two, one in Miramar and another in San Isidro to the south. What did the trick was a charm offensive by Glencairn, an open-consultation effort characteristically dismissed by CCCCH as “a lobbying effort to influence the inhabitants of the area.”
During the course of construction the company brought a stream of visitors through the operation, as an effort to show that mining would not be an environmental nightmare. Glencairn’s financing of a new water supply for Miramar, drawn from wells up-gradient from the mine and transmitted by a new pipeline, solved a long-standing water shortage in the town, giving local people further reason to think the project was a responsible one.
Added to that were social-welfare projects, from paying to pave municipal roads down to providing the town with a garbage truck and sponsoring a painting course for local schoolchildren. A Glencairn-sponsored Miramar team won this year’s national women’s volleyball championship.
“We’re not becoming the father for everything,” says Ulloa, making it clear that the municipality is still responsible. “We work together.”
On the other hand, Bellavista’s location in Central America’s most politically stable country has been a plus, despite the battle from anti-mining groups. Bellavista is in a Zona Franca, a designated area where the government exempts the business from import duties and transaction taxes, and gives a 12-year holiday on corporate income tax and a 10-year holiday on municipal and capital taxes.
The regulatory agencies have been co-operative, seeing the development and approval process as a test of the regulatory regime. Similarly, safety regulators were happy with the construction safety record — a single reportable accident in 1.1 million hours worked. “They are seeing that we really do what we said we were going to do,” Ulloa says.
The national elections, held on Feb. 5, 2006, ended with a presidential cliffhanger, and the national electoral commission has ordered a manual count, with results expected around Feb. 15. Only 3,250 votes separated National Liberation candidate Oscar Arias, a former president, and rival Civic Action candidate, Arias’s former planning minister Otton Solis; each had just over 40% of the vote. A Libertarian candidate stood third with about 8%.
The two principal candidates were split over a major issue, the Central American Free Trade Agreement, with Arias in favour of ratifying the negotiated treaty and Solis, while broadly supportive of free trade, insisting on a renegotiation that would subsidize farmers and put “people before foreign corporations.” Legislative elections gave Arias’s party 25 and Solis’s party 17 seats in the 57-seat Assembly, with six other seats going to the Libertarian Movement, which may support Arias on free trade.
Bellavista’s official opening in December 2005 also offered some of its pioneers a chance to savour a long-deferred success. Michael Seaward, David Hutton and Tim Coates, three of the mining professionals that had directed the Rayrock effort in the 1980s, attended the opening, to unanimous acclaim from the Glencairn people. Dunham Craig, one of those who started at Bellavista with Wheaton River, delivered the best tribute: “I would work on any mine anywhere with those people again.”
Be the first to comment on "Bellavista makes it to commercial production"