Iamgold eyes dialogue with Ecuador over exploration

LIMA, May 21 (Reuters) - Canadian miner Iamgold (IMG.TO: Quote, Profile, Research, Stock Buzz) said on Wednesday it was discouraged by the stop of its exploration work in Ecuador last month, but is hopeful talks with the government will bear fruit soon.

Last month, Ecuador froze all exploration until a new mining law is approved in six months, squeezing an industry that had not yet gotten off the ground.

"This worries us. Obviously, we are discouraged with what happened," Joseph F. Conway, chief executive at Iamgold, said at a gold mining conference in Lima, Peru's capital.

"Nevertheless, we see a change. We are much more positive than before because since the decision, the dialogue between the companies and the government has increased substantially. We are having almost weekly meetings," he said.

Iamgold, which also has operations in Canada and South Africa, controls the Quimsacocha gold project in southern Ecuador. The project has estimated reserves of some 3.3 million ounces of gold.

Conway said Iamgold, which produces close to a million ounces of gold a year, is interested in exploring the area around Quimsacocha for additional resources.

Unlike some of its South American neighbors, Ecuador is not a huge producer of precious metals.

Still, dozens of companies, like Iamgold, Canadian Aurelian Resources Inc (ARU.TO: Quote, Profile, Research, Stock Buzz) and Corriente Resources Inc (CTQ.TO: Quote, Profile, Research, Stock Buzz), are interested in developing the nascent industry and have found what analysts say are among the largest deposits of gold and silver discovered in years. (Reporting by Teresa Cespedes; Writing by Dana Ford; Editing by Christian Wiessner)