Aurania’s Chairman & CEO, Dr. Keith Barron commented, “This decree from the office of President Lasso represents unequivocal support for exploration and mining that is done with due community engagement and care of the environment. The Fruta del Norte gold deposit, brought into production by Lundin Gold in 2019, represents Ecuador’s first example of a mining operation that fits the framework envisioned by the government in order for the mineral industry to take its rightful place as a driver of Ecuador’s economy.”
Our legal counsel in Ecuador, Dr. César Zumarraga, made the following comment, “Today is one of the most important days for the Ecuadorian mining industry in recent years. The document [Decree 151] defines the new public policy which includes clear principles of respect for mining rights and the promotion of best environmental and social practices that coincide with the desire of President Lasso’s government to create a favourable environment for increased investment and exports in the mining industry.”
The Decree lays out the action plan (“Plan”) to develop an efficient and environmentally and socially responsible mining industry, to promote national and foreign investment, and to implement best practices for the exploitation of these resources. The Plan will guarantee security of title, respect pre-existing mining rights and will involve an inter-institutional strategy for the eradication of illegal mining with its associated social and environmental impacts, in favour of legal and responsible mining.
The Decree makes it clear that mining-related matters are managed by the central government, not the provinces or any other entity.
Environment, Social and Governance (ESG)
The central government will incentivize the exploration and mining industry to adopt responsible social engagement and environmental management practices while ensuring that all labour laws and regulations are respected. Specifically:
- Communication: The Ministry of Energy and Non-Renewable Resources (“MENRR”) is to work with other institutions of the State to communicate the benefits of responsible mining to the Ecuadorian people and local communities around mines while minimizing environmental impacts. This communication will focus on the conditions under which mines would be developed, the State’s oversight of these activities and revenue that would flow from successful mining operations.
- Prior consultation: Define the regulation under which free prior consultation will be undertaken with communities in the area of influence of proposed mines.
- Dispute Resolution: Generate optimal technical and legal conditions for the prevention of conflict and controversies; where these exist, to promote discussion between all parties and facilitate resolution of the contentious issues.
- Consultative Committee: Creation of a committee that draws on members of the government and private sector to develop sound mining-related governance policies.
- Strengthen oversight and management of mineral concessions: Within 90 days of the issuance of the Decree, the Regulatory Agency of the MENRR (“Regulatory Agency”) is required to provide a detailed report of all current mineral concessions.
- Prepare for the reopening of the mineral concession application system: The Regulatory Agency is required, within the same timeframe, to report on the current functionality of the concession application and maintenance process and to provide a plan of action to improve the electronic application system. This is required to provide a secure and transparent system that guarantees the integrity of the applications so that the mining concession cadastre can be reopened.
- Accelerate permitting: Within 2 months, the Ministry of Environment, Water and Ecological Transition will review the permitting process, prioritizing the backlog of permits and implementing a more efficient way of processing applications in the future. Pending processes are to be finalized in a period not exceeding 3 months, with a report to the Secretary General of the Cabinet. The name of the official responsible for any processes not completed during this timeframe is to be reported to the Secretary General.
- Communicating the role that responsible mining plays in the economy: The State will provide transparent accounting and will communicate its use of proceeds from royalties and taxes obtained from mining. The State and responsible mining companies have the obligation to disseminate to the public at large, the amounts invested and the impact that mining projects are projected to have on Ecuador’s economy.
- Incentivize the development of priority resource projects: The Decree highlights the importance of bringing known economic deposits, the development of which is projected to have significant impact on the economy, into production in an environmentally and socially responsible manner.
- Promote mining agreements: Encourage formal agreements to be negotiated between mineral concession-holders and the State in which binding economic terms such as tax rates and royalties are negotiated.
- Negotiate mineral concessions held by the State: ENAMI, the National Mining Company, is instructed to negotiate agreements with interested parties to stimulate the exploration and development of mineral concessions held by the State.
- Formalize artisanal mining: Formulate a plan through which informal mining operations can be legalized and incentivized to adopt practices that reduce their environmental impact and encourage engagement with surrounding communities, while ensuring that these operations contribute to the formal economy via due taxes.
The State undertakes to eradicate illegal mining due to its negative impacts on the national economy, the environment, the health of the surrounding communities and the erosion of confidence in the security of title. The Decree calls for inter-ministerial collaboration to achieve this goal.
Aurania is a mineral exploration company engaged in the identification, evaluation, acquisition and exploration of mineral property interests, with a focus on precious metals and copper in South America. Its flagship asset, The Lost Cities – Cutucu Project, is located in the Jurassic Metallogenic Belt in the eastern foothills of the Andes mountain range of southeastern Ecuador.
Information on Aurania and technical reports are available at www.aurania.com and www.sedar.com, as well as on Facebook at https://www.facebook.com/auranialtd/, Twitter at https://twitter.com/auranialtd, and LinkedIn at https://www.linkedin.com/company/aurania-resources-ltd-.
For further information, please contact:
VP Investor Relations
Aurania Resources Ltd.
Dr. Richard Spencer
Aurania Resources Ltd.
Swiss Resource Capital AG
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This news release may contain forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Aurania. Forward-looking statements include estimates and statements that describe Aurania’s future plans, objectives or goals, including words to the effect that Aurania or its management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to Aurania, Aurania provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to Aurania’s objectives, goals or future plans, statements, exploration results, potential mineralization, the corporation’s portfolio, treasury, management team and enhanced capital markets profile, the estimation of mineral resources, exploration, timing of the commencement of operations and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, regulatory, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, the effects of COVID-19 on the business of the Company including but not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restrictions on labour and international travel and supply chains, and those risks set out in Aurania’s public documents filed on SEDAR. Although Aurania believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Aurania disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.