Decree cast shadow over Crucitas and Bellavista

With legal action still pending over disputed rights to the gold and copper project in Venezuela, Vannessa Ventures (VVV-V) says that its Crucitas gold project in Costa Rica is safe from a recent Presidential decree banning open pit mining.

According to a Reuters report, newly elected President Abel Pacheco, of the Social Christian Unity Party, said the decree is designed to protect Costa Rica’s environment, which supports the country’s tourism industry. The decree means all open pit exploration and mining projects awaiting government approval are halted.

Carlos Manuel Rodriguez, Environment and Energy Minister, told Reuters that he plans to meet with affected companies to work out plans to close down their projects.

On Friday, Vannessa issued a statement saying that the government has issued two statements, one a proposed law prohibiting large open pit mining projects, and an a decree for a moratorium on open pit mining.

Vannessa says the proposed law applies only to new projects, not those already approved. The company notes that Costa Rica’s Constitution does not allow retroactive effects against existing rights.

Also, says Vannessa, the decree refers again to new projects only and that previously acquired legal rights will be respected.

The company does concede that some of its exploration concessions in Costa Rica might be subject to review, but Crucitas will not be affected.

Vannessa’s management team is currently in Costa Rica meeting with government officials.

Vannessa’s plans at Crucitas call for the initial exploitation of near-surface gold-bearing saprolite material, and the company has been issued a permit to do so. Initial construction costs are pegged at US$27 million.

At last count, Crucitas’ near-surface measured and indicated resource stood at 10.3 million tonnes grading 2.2 grams gold per tonne. The inferred resource is about 3 million tonnes at 1.9 grams gold. All the resources are based on a cutoff grade of 0.8 gram gold per tonne.

The saprolite material extends to 60 metres in places but has an average depth of 21 metres. The topography at Crucitas — essentially two hills — offers a low stripping ratio.

Crucitas also hosts a gold-bearing hard-rock resource, bringing the total measured and indicated gold resource to 29.6 million tonnes grading 1.5 grams gold and 3.4 grams silver, and the total inferred resource to 10.1 million tonnes of 1.6 grams gold and 2.9 grams silver.

Elsewhere, Glencairn Explorations (GLJ-V) says that the decree does not appear to affect the Bellavista low-grade gold deposit, which it recently agreed to buy from Wheaton River Minerals (WRM-T).

Bellavista received all necessary environmental approvals in Feb. 2001.

Glencairn can acquire Bellavista by issuing 4 million shares and paying $500,000 in cash. Also under the deal, Wheaton will be granted a three-year option to buy 4 million Glencairn shares at 60 apiece. It can buy up to another 2 million shares at $1 each for three years.

In the end, Wheaton would be left with a 21.2% stake in Glencairn’s. That would climb to 40.3% should Wheaton exercise of all of its options.

The company plans on confirming that rights to the mine will be maintained before proceeding with the purchase.

Bellavista, which centres on an epithermal gold-silver deposit, hosts 11.2 million tonnes grading 1.54 grams gold per tonne. This is sufficient to yield 60,000 oz. annually over more than seven years at a total operating cost of US$179 per oz.

Capital costs are pegged at US$28 million.

In late-afternoon trade on the TSX Venture Exchange Vannessa shares were 9 higher at $1.95; Glencairn was trading at 75, up 3 pennies from Thursday’s close.