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Ecuadorian government provides support for mineral exploration by making provision to extend "Initial exploration" phase
Mineral concessions in Ecuador are granted for a period of 25 years, provided that they are kept in good standing through annual concession fee payments to the State, annual work and expenditure commitments being met and annual environmental impact reports being presented, all reports meeting the regulated standards. Current legislation is that the life of a mineral concession is segmented into a four-year “Initial Exploration” phase, followed by a four-year “Advanced Exploration” stage, followed by a two-year “Economic Evaluation” stage, leading to mine construction and mineral production in the remainder of the 25-year term. The annual concession fee payable to the State doubles from approximately US$10 per hectare in Initial Exploration to US$20 per hectare in Advanced Exploration – the concept being to incentivize exploration companies to reduce their concession holdings to focus on specific exploration target areas as quickly as possible – and therefore to free up the rejected areas for further investigation by competitor companies.
The new legislation adopted on December 9 clarifies that the “Initial Exploration” phase of a mineral concession begins not on the date that the concession was granted, but on the date on which the mineral concession-holder receives the permits required to effectively carry out operational activities on each concession. For Aurania’s Lost Cities-Cutucu Project (the “Project”), this means that the Company may apply for extensions of between 16 and 40 months, depending on the date on which permissions were granted for each of its 42 concessions. Extending the Initial Exploration phase means that the annual fees paid to the State remain at approximately US$10 per hectare through this extension period, rather than doubling to approximately US$20 per hectare after January 2021.
Aurania’s Chairman & CEO, Dr. Keith Barron commented, “We applaud and thank the Ecuadorian government for recognizing that permitting delays have hamstrung the exploration industry – and for taking such decisive action to correct this situation. We look forward to making mineral discoveries that will help to drive the growth of the Ecuadorian economy in the years ahead. I would like to thank Minister Ortiz, Aurania’s legal counsel, and other exploration companies working in Ecuador for their efforts in having this legislation adopted.”
As stipulated in the new regulation, Aurania will be submitting, within 30 days of the adoption of the legislation, applications to extend the Initial Exploration phase on each concession within the Project. According to the legislation, the extension of the Initial Exploration phase for Aurania’s concessions that experienced the shortest delay in permitting will be to April 16, 2022, and for those that have been delayed the longest, to May 12, 2024. Annual concession fee payments will continue at a rate of approximately US$10 per hectare during the extended “Initial Exploration” phase – payments are due by the end of March each year.
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-.
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.
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