Company News

UPDATE 2-Ecuador meets with Canadian miners on assets

(Recasts with comments, changes dateline)

TORONTO/QUITO, April 25 (Reuters) - Ecuador’s president has met with a group of Canadian miners to offer reassurances about the future of mining in the country, a move that boosted shares of the companies on Friday despite continued uncertainty about their mining concessions and exploration rights.

Companies such as Iamgold IMG.TO and Aurelian Resources ARU.TO have been scrambling for answers since Ecuador issued a decree last week revoking hundreds of mining concessions and freezing exploration.

In similar statements, Iamgold, Aurelian and six other companies with Ecuadorean concessions said that President Rafael Correa had told them on Thursday that the six-month freeze had been called to allow Ecuador time to write new mining laws, and that Correa supported “the development of responsible mining.”

Corriente Resources CTQ.TO Vice-President Dan Carriere told Reuters that Correa had offered assurances that the companies were not going to lose their assets, but other firms present at the meeting did not seem as certain.

"I think the most important thing that can be taken away from that meeting is that they met," said Bill McCartney, head of business development at Dynasty Metals & Mining DMM.TO.

“We want to work with them to find out what the government’s true intent is,” he said.

An official at one of the other small miners said that Correa had offered no guarantees at the meeting.

Ecuador Oil and Mines Minister Galo Chiriboga said earlier this week that companies will be able to choose which properties to keep out of a three-concession limit.


A top mining ministry official said the government will impose the property restrictions, but companies will most likely get to keep those projects in which they have made their most important findings.

“The president called the meeting to tell companies what we plan to do and to stay calm,” said the official who participated in the meeting and asked not to be named. “The decree will not be applied the same for everyone.”

Shares of the junior miners shot up on the Toronto Stock Exchange, with Corriente up 16.7 percent, Aurelian up 28.7 percent and Dynasty up 27.6 percent. The larger Iamgold climbed 2.4 percent amid an overall rise in TSX materials stocks.

Corriente shot up 54 Canadian cents to C$3.77, while Aurelian rose 93 Canadian cents to C$4.21. Dynasty climbed 69 Canadian cents to C$3.19, and Iamgold was up 14 Canadian cents at C$5.96.

However, the stocks were still well down from last week’s levels.

Iamgold Chief Executive Joseph Conway was not available for comment, but company spokeswoman Lisa Doddridge, who was not present at the meeting, said she did not want to read much into Correa’s comments.

“I think that every company is entitled to their interpretation of Correa’s comments,” she said, adding that Iamgold was still unsure of the timing of the feasibility study for its Quimsacocha gold deposit, which contains an estimated 3.3 million ounces of gold.

“I don’t think any company got any specific information that pertained to their specific projects, so we’re continuing to seek clarity.”

The group of companies meeting with officials also included International Minerals IMZ.TO, Ecometals Ltd EML.V, Salazar Resources SRL.V, and Cornerstone Capital Resources CGP.V.

$1=$1.015 Canadian Additional reporting by Cameron French in Toronto; editing by Rob Wilson