Ecuador-focused miner SolGold (LON, TSX:SOLG) said drilling at its Cascabel copper-gold project in the country鈥檚 north has, further increasing the size of one of the biggest copper discoveries of recent years.
Together with the high-grade find, over 1.5% copper equivalent, the company has also detected mineralization within the inferred resource area at the Alpala resource, as well as some medium grade mineralization of between 0.7% copper equivalent and the high-grade threshold of 1.5%.
鈥淭he drilling campaign continues to deliver to our expectations with these latest results revealing previously unknown mineralization and providing a clear indication of the growth potential that exists through the extension of the Alpala resource,鈥� chief executive Nick Mather said .
As part of its ongoing exploration work at the asset, the Australian miner has so far completed 189,984 metres of drilling on Alpala, which includes Alpala Northwest, Alpala Western Limb, Alpala South and Trivinio.
SolGold鈥檚 flagship asset has piqued the interest of some major miners, including BHP
The previously unknown source intrusion was found at the Alpala Northwest prospect, and proves Cascabel has more potential than previously thought for a further significant resource extension, the company said.
SolGold鈥檚 January 2019 updated mineral resource estimate outlines 2.05 billion tonnes copper at 0.60% copper equivalent in the indicated category (8.4m tonnes copper and 19.4m ounces gold), and 900 million tonnes at 0.35% copper equivalent in the inferred category (2.5m tonnes copper and 3.8m ounces gold).
SolGold is worth $900 million on the London Stock Exchange, and the company鈥檚 stock is up 37% compared to this time last year.
SolGold鈥檚 flagship asset has piqued the interest of major miners, including BHP (ASX, NYSE:BHP). The world鈥檚 largest mining company last year acquired聽, increasing its exposure to copper.
The move pushed Australia鈥檚 largest gold producer, Newcrest Mining (ASX: NCM), to聽, consolidating its position as SolGold鈥檚 top shareholder.
Ecuador has gained ground as a mining investment destination in the past two years, thanks to a revised regulatory framework and a聽聽that attracted about 420 applications for concessions in less than a year.
Canada鈥檚 Lundin Gold (TSX:LUG) is set to begin operations at its聽, and other multinational mining companies are looking at Ecuador with interest. Dundee Precious Metals will begin investing in the Andean nation through junior miners already operating there, while Barrick Gold鈥檚 chief executive Mark Bristow is said to have visited the country several times.
Clouds on the horizon
Existing and future projects, however, risk delays and potential halts due to red tape and growing local opposition to the extraction of the country鈥檚 resources.
According to the聽, the ongoing expansion of mining exploration in the South American country is raising the risk of tensions between companies and the local population.
In two landmark cases last year, Ecuadorian courts sided with rural and indigenous communities who argued the national government had failed to inform them it was setting aside parts of their territories for mineral exploitation. That information,聽Fitch聽notes, is a right protected by the 2008 Constitution.
Ecuador plans to attract $3.7 billion in mining investments in the next two years, up from $270 million in 2018.
Last month, Gir贸n 鈥� in the province of Azuay 鈥� voted against mining activities in a popular referendum held alongside a regional election. The move, says聽Eileen Gavin, Senior Latin America analyst at , could further jeopardize INV Metals鈥� (TSX-V: INV) Loma Larga gold, silver and copper project in the region. The Canadian miner has already announced outside of Gir贸n canton.
鈥淭he newly-elected prefect of Azuay, Yaku P茅rez聽Guartambel, a lawyer who聽calls himself an 鈥榠ndigenous revolutionary鈥� and took 29% of the vote (in a crowded field of 10), now has a mandate to challenge the mining sector,鈥� Gavin writes. 鈥淗e has declared that his聽鈥榝irst, second and third priorities鈥� are protecting Azuay鈥檚 water sources by opposing mining, adding that聽he would propose a provincial-wide consultation on mining in Azuay (which has 15 cantons in all).鈥�
As mining projects face headwinds from rising tensions, investors鈥� courage will be tested, the analysts conclude, which could thwart Ecuador鈥檚 plan to attract $3.7 billion in mining investments in the next two years, up from $270 million in 2018.
The government is in the final days of completing a new policy that will mirror that of countries with greater mining experience, such as Chile and Peru, in order to streamline procedures and increase Ecuador鈥檚 competitiveness.