* Crucitas gold mine project stalled in court
* Company says Costa Rica discouraging investment
By Alex Leff
SAN JOSE, Costa Rica, Nov 11 Canada's Infinito
Gold Ltd said on Thursday its Crucitas gold mine has been set
back 23 months by legal challenges in Costa Rica and is now
aiming for production in the first quarter of 2012.
Costa Rica's Supreme Court ruled in April the gold mine
project could move forward, but work was immediately stalled by
an appeal lodged by environmental groups who claim the open-pit
mine would damage the delicate ecosystem near the site.
A tribunal will decide on Dec. 6 whether to lift the
measures that have closed down the mine, which has indicated
resource of 1.2 million ounces.
"(If the court allows), the next day we will be starting
construction. In the best case scenario, our first ounce will
be processed in February or March of 2012," Crucitas spokesman
Juan Carlos Obando said.
"It's going to take a year to 14 months to finish the
construction process," he said.
Infinito IG.V has already sunk $127 million into the
project, largely on exploration and infrastructure including
improved electricity and roads for the region, he said.
The company's debt holders have stood by the project in the
face of default in the hope the legal issues will be resolved.
Gold mines are increasingly attractive to investors as
prices soar to record highs. Gold prices edged up on physical
demand on Thursday to $1,407.34 an ounce, after hitting an
all-time high of $1,424.10 on Tuesday.
"In Canada, (the debt holders) are convinced that this
discussion over Crucitas will allow the company to develop a
green model for mining," Obando said.
But further court appeals of the decision in December could
drag the legal hurdles out for months, he told reporters.
Costa Rica prides itself on its lush forests that attract
tourists, and Congress approved a bill this week, which
President Laura Chinchilla is expected to sign into law, to
prohibit all new open-pit metallic mines in the country.
The law is not retroactive and would not apply to Crucitas
but Obando said it would negatively affect Infinito's future
expansion in Costa Rica. Infinito also has concessions in
(Editing by Mica Rosenberg; Editing by David Gregorio)