Corriente delays startup of Ecuador mine

Vancouver — Already facing a suspension order from the Ecuadorian government, Corriente Resources (CTQ-T, ETQ-X) is delaying the startup of its Mirador copper mine in order to minimize the company’s obligations to equipment suppliers.

The move comes as tensions caused by leftist President Rafael Correa’s efforts to rewrite the Andean country’s constitution have eased temporarily following the sudden death of Ecuador’s defence minister, Guadalupe Larriva.

Correa called for three days of mourning after Larriva and her daughter were killed in a mid-air helicopter collision in late January.

At the request of the federal government, Corriente suspended its Mirador project camp activities in southeastern Ecuador in December, in a bid to aid in the negotiating process between the government and anti-mining protesters.

Corriente said it agreed to the request in order to ensure the safety of local communities and its supporters.

At the time, the Vancouver company said it would work with representatives of Correa’s incoming administration on its plan to develop Mirador and to ensure that the project construction activities and mine development will continue to have the full support of the government of Ecuador.

However, in late January, Corriente said its plan to start production by late 2008 was based on having key permits and government agreements already completed.

Corriente shares, which traded as high as $7.50 in May 2006, closed at $3.09, on the statement, up 19.

Since the required agreements are still being processed and the company is still under a suspension order by the Ministry of Mines, Corriente said its board of directors has elected to minimize its existing project obligations with suppliers of key long-lead time components to the project.

“Based on current information, it is estimated that the start of production at Mirador will be delayed from late 2008 as planned, to mid-2009, largely due to adjustments to long lead-time equipment deliveries as a result of this decision,” the company said.

Corriente also said it is not clear yet when field work at the project will resume.

However, Corriente CEO Ken Shannon said the company remains committed to the project and nearby communities, with which it has worked over the last six years.

“Ultimately, it is our belief that the will of the local communities to provide a better future for their children will be the deciding factor to proceed with the development of responsible, long-term mining activities at Mirador,” Shannon said.

Corriente trades in a 52-week range of $2.80 to $7.74. At presstime, shares were trading at about $3.00.