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Wednesday, January 13, 2010
Today's News Headlines
* MEM sees US$5bn in 2010 mining investment, approves norm to speed permitting - Peru
* Junior roundup: Ecometals, Li3, Strait Gold, U3O8, Oro Silver, Oroco, Xtierra - Regional
* Last year was a good one for mining, says govt - Argentina
* Solitario, Votorantim plan 2010 exploration, 2011 feasibility work at Bongará - Peru
* Great Panther Silver output up 22% in 2009 - Mexico
* First Majestic increases output 18% in Q4 - Mexico
* Chariot holds "positive" public hearing on Mina Justa - Peru
* Andes Gold set to wrap up Roman purchase - Ecuador
* CF's petrochemical plant will not affect Shougang operations - report - Peru
* Expert: Chuquicamata strike marks precedent for local mining - Chile
* IN BRIEF Santa Cruz to study natural resources in mining areas - Argentina
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* MEM sees US$5bn in 2010 mining investment, approves norm to speed permitting - Peru
Investment in mining projects in Peru could reach US$5bn in 2010, considering the estimated US$30bn worth of projects in pipeline for the next six years, the country's energy and mines ministry (MEM) reported.
"Five billion dollars per year would mean a doubling of the investments seen last year, which were roughly US$2.38bn," said deputy mining minister Fernando Gala.
The official noted that the figure is an estimate, pointing out that mining investment varies depending on the stage of development of any given project and access to financing.
EIS EVALUATION OUTSOURCING
Meanwhile, MEM has approved a legal norm to allow the outsourcing of mining project EIS evaluations that aims to reduce approval times from 210 days to a maximum of 150 days, Gala said.
The change will apply to large-scale projects and will allow third parties that are not part of the ministry to work on EIS evaluations, the ministry said previously.
By Business News Americas staff reporters
* Junior roundup: Ecometals, Li3, Strait Gold, U3O8, Oro Silver, Oroco, Xtierra - Regional
Toronto-based Ecometals (TSX-V: EC) reported it has entered into an agreement to sell its 90% stakes in Ecuadorian subsidiaries Condormining and Condorview to private Canadian company Alca Gold for US$9.0mn in cash.
The two subsidiaries hold the mineral rights, surface rights and physical assets of the Cóndor gold project in southern Ecuador. The remaining 10% stakes are controlled by a military affiliated office of Ecuador's government.
Ecometals will keep working at its Río Zarza exploration project in Ecuador and Serra do Navio manganese and Pedra Branca gold projects in Brazil.
***
Lima-based Li3 Energy (OTC BB: LIEG) has engaged Argentine mining consultants Rojas & Asociados as project manager for upcoming lithium exploration programs in Chile, Argentina and Peru, both firms reported.
Li3 aims to evaluate 15 lithium properties covering some 200,000 acres (80,937ha) with sampling, geophysics and drilling. The goal is to reach the preliminary economic assessment stage at priority targets by end-2010.
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Toronto's Strait Gold (TSX-V: SRD) has closed the second and final tranche of a private placement for total proceeds of Cdn$541,900 (US$520,713), which it will use for working capital and to fund exploration at its Alicia copper-gold property in Cuzco, Peru, the company reported.
***
Torontonian U3O8 Corp (TSX-V: UWE) reported it has identified key geological and chemical characteristics for uranium upon analyzing a historic bore hole from Guyana's Roraima Basin.
From the bore hole and airborne geophysical data U3O8 has defined additional exploration targets where the aim is to identify drill targets for testing in 2010, the company said in a statement.
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Vancouver-based Oro Silver Resources (TSX-V: OSR) has completed its earn-in acquisition of a 100% interest in the Ana Camila claim group adjacent to its El Compás gold-silver project in Mexico's Zacatecas state, the company said in a statement.
Ana Camila measures 320ha and covers the 500m northern extension of the El Compás gold-silver vein system, Oro said.
***
The latest results from phase 2 drilling at Vancouverite Oroco Resource's (TSX-V: OCO) Cerro Prieto project in Mexico's Sonora state include 22.5m of 4.36g/t gold, 26.0m of 2.96g/t gold and 19.0m of 2.99g/t gold, all in infill holes.
Results from step out holes include 61.0m of 0.20g/t gold including 7.8m of 0.55g/t gold.
Oroco drilled 8,576m in 42 diamond holes in 2009. The holes also yielded silver, lead and zinc mineralization.
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Toronto's Xtierra (TSX-V: XAG) reported it has begun drilling on the El Dorado gold project in Mexico's Zacatecas state. Tecmin Servicios is carrying out the drill program, which initially contemplates 2,000m of underground and surface work.
By Business News Americas staff reporters
* Last year was a good one for mining, says govt - Argentina
Despite the international economic crisis in 2009, it was a good year for the Argentine mining sector, the country's mining ministry said in a statement.
According to the ministry, last year four new projects were inaugurated that together brought in some US$1bn in investments and created more than 8,000 new jobs.
The ministry highlighted the Manantial Espejo silver project in Santa Cruz province, owned by Canadian company Pan American Silver (TSX: PAA), with an investment of US$230mn, the Gualcamayo gold project in the San Juan province that belongs to Toronto-based company Yamana Gold (TSX: YRI) and required around US$285mn, the US$260mn that mining company Minera Sierra Grande, the local unit of the China Metallurgical Group (CMG), invested in restarting its Sierra Grande iron ore project, and finally Canadian company Silver Standard Resources' (TSX: SSO) US$200mn investment in its Pirquitas project, in Jujuy province.
OTHER ANNOUNCEMENTS
The mining ministry also highlighted the news from company Loma Negra that it would be investing US$127mn to increase its cement production capacity by 15%, and the announcement of Australian company Troy Resources (TSX, ASX: TRY) that it would be starting construction of the Casposo gold and silver project in San Juan province with an investment of US$440mn.
EXPLORATION UP
The ministry also said that in 2009 exploration drilling surpassed its historic average when it hit 570,000m, four times the recorded average of around 140,000m.
By Business News Americas staff reporters
* Solitario, Votorantim plan 2010 exploration, 2011 feasibility work at Bongará - Peru
Denver-based Solitario Exploration & Royalty (Amex: XPL, TSX: SLR) reported that its partner on the Bongará zinc project in Peru, Brazil's Votorantim Metais, is planning to start road construction and underground access to the San Jorge deposit in 2010.
Metallurgical testing and 10,000m of surface drilling are also in the plan for this year.
The goal is to begin a detailed feasibility study in 2011, Solitario said in a statement.
Solitario noted that the timing of the 2010 activities depends on the receipt of permits, and Votorantim is updating the social risk impact assessment in parallel with archeological clearance activities and other permit requirements.
Approvals are expected during Q2, Solitario said.
Specifically, road construction will include some 18km of new roads to the deposit, which to date has been accessible only by helicopter or on foot. The companies plan 700m of underground workings.
Advanced metallurgical test work is due for completion during Q1, Solitario added.
Votorantim can earn up to 70% in Bongará by spending at least US$18mn on exploration and development and making annual cash payments of US$200,000 to Solitario until a production decision is made. The Brazilian would further finance Solitario's 30% interest until production starts in the form of a loan.
By Business News Americas staff reporters
* Great Panther Silver output up 22% in 2009 - Mexico
Vancouver-based Great Panther Silver (TSX: GPR), which recently changed its name from Great Panther Resources, increased its production last year by 22% compared to 2008 to slightly more than 2.20Moz of silver equivalent, the company reported in its latest production statement.
In the fourth quarter Great Panther put out 625,288oz of silver equivalent, up 26% from the same quarter a year before. By individual metal, the company produced 390,026oz silver and 2,456oz gold in Q4.
The company's Guanajuato mine in Mexico achieved record output in the fourth quarter with 470,025oz of silver equivalent or 9% more than in Q3 and 37% more than in 4Q08. By individual metal the mine produced 287,101oz silver and 2,367oz gold in the recent period.
The compatriot Topia mine produced 155,263oz silver equivalent or 1% more than in the year-earlier quarter. Topia produced 102,925oz silver and 89oz gold in the fourth quarter.
Great Panther said it expects to produce 2.5Moz silver equivalent in 2010 and 3.8Moz by 2012. The company started production in 2006.
By Business News Americas staff reporters
* First Majestic increases output 18% in Q4 - Mexico
Vancouver-based First Majestic Silver (TSX: FR) in the fourth quarter produced 1.25Moz of silver equivalent, 15% more than in the quarter before and 18% higher than in the year-ago period, the company reported in a statement Tuesday.
By individual metal the company in Q4 produced slightly more than 1.10Moz silver, 18% higher than in Q3, 1.57Mlb of lead (712t) or 7% less than in the quarter before, and 691oz of gold or 6% less than in the third quarter of last year, First Majestic said.
The company owns three operating silver mines, all in Mexico: La Encantada, La Parrilla and San Martín.
First Majestic also owns the Del Toro mine, also in Mexico, which in December was granted approval on an EIS for the construction of a new flotation plant. The company expects to receive a permit for land use on the first quarter of this year.
By Business News Americas staff reporters
* Chariot holds "positive" public hearing on Mina Justa - Peru
Toronto-based Chariot Resources (TSX: CHD) has held a public hearing required as part of the environmental and social impact assessment (ESIA) for its 70%-controlled Mina Justa copper project in Peru, with a positive reaction from the community at San Juan de Marcona, according to the company.
A 30-day period is in place for any additional comments or observations by the public, after which the ESIA will move to the final government approval stage. The energy and mines ministry is in charge of the review process.
"We are pleased and reassured that our work in identifying and working with the various interest groups, together with regular communication meetings within the community, have had a positive impact and that we have advanced our ESIA to [the] next stage of the approval process," Chariot CEO Ulli Rath said in a statement.
Based on the original feasibility study, Mina Justa would produce 481,596t of copper cathode and 598,801t of copper in concentrates over an 11.5-year life, with startup capex of US$576mn. Ongoing optimization studies have shown that life-of-mine production could be increased by 427Mlb (193,865t).
Chariot is also making efforts to sell the company.
By Business News Americas staff reporters
* Andes Gold set to wrap up Roman purchase - Ecuador
New York-based Andes Gold (Pinksheets: AGCZ) said it is moving ahead of schedule in its purchase of Ecuador's Roman gold mine and expects it will wrap up the acquisition during or before February.
"The acquisition of the Roman mine will add two new virgin gold veins of ore production," said Alex Diaz, president of Andes Gold, in a statement. "The company expects to reach production goals of 40t of ore produced daily, within four months of signing the final agreement."
Andes also runs the Miranda yellow metal project in Ecuador's southern El Oro province.
Further details were not provided.
By Business News Americas staff reporters
* CF's petrochemical plant will not affect Shougang operations - report - Peru
Illinois-based fertilizer manufacturer and distributor CF Industries' (NYSE: CF) planned nitrogen complex in San Juan de Marcona in Peru's southern Ica region will not affect the operations of Chinese-owned iron ore producer Shougang Hierro Perú, CF's representative in Peru, Ismael Benavides, was reported as saying by local business daily Gestión.
"Shougang's operations are 5km to 10km from the planned petrochemicals pole," Benavides added.
On January 22, 2009, Peru's mines and energy ministry (MEM) declared San Juan de Marcona the site for the installation of a petrochemical pole and in October zoning for future plants was defined.
However, Shougang argues the land forms part of its concession area over which it holds the rights.
According to Benavides, the area where CF proposes to construct its ammonia and urea plants totals 1,970ha, which represents 3.3% of Shougang's 60,000ha total concession area.
The representative added that it was a mistake to say that petrochemical companies would have to pay a fair price to Shougang for land declared suitable for the development of the petrochemical pole as the land is state-owned and under the administration of the respective regulator.
"Any problem Shougang has, or any discussion, must be resolved with the state," Benavides said.
CF is coordinating the development of its project with MEM for which it plans to submit its EIS at the end of this month.
By Business News Americas staff reporters
* Expert: Chuquicamata strike marks precedent for local mining - Chile
The 48-hour strike last week at Chilean state copper company Codelco's Chuquicamata mine and the pay settlement that put an end to it has marked a new standard for labor negotiations in Chile's mining sector that may have distanced local workers from the realities of the business, mining economics expert and professor at Santiago's Catholic University Gustavo Lagos told financial daily Diario Financiero.
"The strike began because [Chuquicamata's] workers were wrongly comparing themselves with those at [BHP Billiton's (NYSE: BHP) 57.5%-owned] Escondida. It was not appropriate for them to take that attitude," Lagos said.
Months before labor negotiations took place at Chuquicamata BHP Billiton, settled amicably with Escondida's workers, granting them a 5% pay raise and a bonus per worker worth about US$25,000, higher than any previously granted in the Chilean mining industry.
According to Lagos, Chuquicamata's workers - although belonging to the second largest copper mine in the world, versus Escondida which is the largest - did not have a valid basis on which to demand the same bonuses because their level of productivity is considerably lower.
After a two-day strike that started January 4, Codelco granted the workers a 4% pay raise in addition to an inflation adjustment and a 12.1mn-peso bonus (about US$24,700 as of Tuesday).
Lagos added that another factor that set the Chuquicamata strike apart from all others before it was the fact that Chile's general population opposed the workers on grounds that even before their recent raises they already earned well above the average wage in the country.
Although this is also true of workers at Chile's privately owned mines, Chuquicamata is controlled by a state company that contributes all its earnings to the nation's treasury and is regarded as one of the country's main cash cows.
Chuquicamata is part of the Codelco Norte branch located in region II. The mine produced 613,000t of copper in the first three quarters of last year out of the company's total 1.21Mt in the period. Codelco is the world's largest copper producer.
By Business News Americas staff reporters
* IN BRIEF Santa Cruz to study natural resources in mining areas - Argentina
The Argentine mining ministry and the Santa Cruz provincial production ministry have signed an agreement to finance a survey of the natural resources located within mining areas in the province.
With the agreement the ministries also hope to encourage investments in the region, the mining ministry said in a statement.
The mining ministry has promised to manage the US$200,000 in funding that will be used to carry out the study, which should be completed within six months.
By Business News Americas staff reporters
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In-deph interview
* "We'll have a number of projects on the go in Latin America in 2010"
Robert Quartermain
CEO
Silver Standard
Argentina, Chile, Mexico, Peru
http://www.bnamericas.com/interviews/mining/Robert_Quartermain_,Silver_Standard,/169679486
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Main companies covered in today's news
* Coeur d'Alene Mines Corporation
http://www.bnamericas.com/company-profile/en/Coeur_d*Alene_Mines_Corporation-Coeur_d*_Alene/169679486
* Ecometals Limited
http://www.bnamericas.com/company-profile/en/Ecometals_Limited-Ecometals/169679486
* U3O8 Corp
http://www.bnamericas.com/company-profile/en/U3O8_Corp-U3O8_,Canada,/169679486
* Solitario Exploration & Royalty Corp.
http://www.bnamericas.com/company-profile/en/Solitario_Exploration_*_Royalty_Corp,-Solitario_Exploration/169679486
* Pan American Silver Corporation
http://www.bnamericas.com/company-profile/en/Pan_American_Silver_Corporation-Pan_American_Silver/169679486
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