Ms. Candace MacGibbon reports
INV METALS PROVIDES UPDATE
INV Metals Inc. has provided an update on the 100-per-cent-owned Loma Larga property, located in Ecuador.
The company is progressing with the required re-engineering and cost estimation to update the 2019 feasibility study (FS) at Loma Larga, incorporating the relocation of the processing and tailings facilities to its land surface rights associated with the deposit. The update to the 2019 FS will provide new capital and operating cost estimates and economics as a result of the relocation and will provide the basis for the submission of the environmental impact study (EIS) to obtain the relevant environment permits for Loma Larga. The schedule goal for the completion of the updated 2019 FS and the draft EIS is the end of first quarter 2020. Preliminary work indicates that the update is not expected to have a material impact on the previously estimated costs.
Candace MacGibbon, chief executive officer, stated: "Loma Larga is one of five strategic mining projects identified by the Ministry of Energy and Non-renewable Resources and is expected to be the next large-scale mine following the successful construction of the Mirador and Fruta del Norte mines last year. The company is progressing its financing and permitting efforts within the laws and regulations of Ecuador with the support from our many stakeholders, the government and the mining industry."
She continued: "Loma Larga is a relatively straightforward mining project that we are committed to executing in a socially responsible and environmentally sustainable manner. The underground mine and related processing infrastructure have been designed to have a very minimal footprint, with an estimated disturbance area of less than 80 hectares at the project site. The process plant design, the use of paste backfill and a filtered tailings disposal method will serve to minimize the use of surface water and reduce treated water discharge. The focus of our team this year will be to obtain the required permits and financing to allow for a construction decision by the board of directors."
Loma Larga has been designed as an environmentally responsible underground gold mine with copper and silver byproducts. The mine is accessed through a ramp, and the processing facilities will produce two concentrates for export, while approximately 55 per cent of the tailings will be returned to the mine as backfill and the tailings facility will be covered and revegetated upon closure. The use of a filtered tailings facility with structural support addresses concerns relating to the recent high-profile catastrophic failures of conventional tailings facilities. As a result of the production of concentrate, no cyanide will be required in the processing of the ore, which will be shipped to a smelter and refinery, outside of Ecuador.
The company is dedicated to the protection and stewardship of water. No lakes or rivers are located near the mine or the related infrastructure locations. All of the water that will be used in the process facilities will be pumped from the mine to the plant as a result of the dewatering process and will be recycled. The treatment and protection of the water at and around the site will take a multipronged approach. The site will have diversion channels to collect rainwater and divert it away from the site. Water that is collected from the mine, processing and tailings facilities and other required infrastructure will be treated to the highest Ecuadorean and international standards before it is discharged into the environment. Several academic professionals have studied the hydrological environment at Loma Larga, and the company has many years of independent monitoring of the water quality in the area to serve as a baseline for water quality monitoring.
The company's team has been working with the communities in the direct and indirect areas of influence since the deposit was discovered in 2004. The company's focus to date has been to partner with the communities to focus programs on education, training, animal husbandry, microenterprises, farming and environmental stewardship. The company will continue to work with the communities in an open and transparent manner.
The 2019 FS demonstrates that the development of Loma Larga will provide substantial economic benefits to the future employees of INV Metals, the company's communities, and the local, provincial and federal governments of Ecuador. The development and operation of the Loma Larga mine will also provide numerous employment and business opportunities for the local communities and within the region. Various benefits estimated in the 2019 FS using a gold price of $1,250 (U.S.) per ounce are expected to include:
- Continuation of the company's numerous social programs in the communities of Chumblin, San Gerardo, Giron and Victoria del Portete;
- During the construction period of 18 to 24 months, an estimated direct employment of 875 people;
When the mine is in operation, an estimated 450 permanent direct jobs;
- The creation of indirect jobs with local procurement initiatives and training opportunities;
- Wages, social security and pension benefits estimated at $15-million annually, for a total of $186-million over the mine life;
- Employee profit-sharing taxes (3 per cent) estimated at $27-million;
- Taxes to the government of Ecuador estimated at:
Corporate income tax (25 per cent): $177-million;
State profit-sharing tax (12 per cent): $107-million;
Employment taxes (35 per cent): $52-million;
Value-added tax (12 per cent) and import duties (0 per cent to 5 per cent): $110-million;
Royalties (5 per cent): $108-million.
Azuay referendum application
Another application to hold a proposed referendum related to mining activities within the province of Azuay, submitted by the same individual as the previous request referred to below, was presented for consideration to the Constitutional Court of Ecuador on Jan. 7, 2020. The company anticipates that the Constitutional Court will consider the validity and the constitutionality of the application in the coming weeks. The company's Loma Larga mineral resources and reserves are located within the province of Azuay.
The company has been advised by its Ecuadorean counsel that the questions that have been presented to the Constitutional Court in the application are similar to those previously proposed by the same individual, and that the standards and criteria established by the Constitutional Court in the company's press release of Sept. 18, 2019, have not been met.
The current application request contains the following questions for consideration:
Do you agree with the prohibition, without exception of prospecting, exploration and exploitation activities of artisanal, small-, medium- and large-scale metal mining, in water sources, recharge, discharge and water regulation areas, highlands, wetlands, forests protectors and fragile ecosystems in the province of Azuay?
Do you agree that the metal mining concessions that have been granted prior to this popular consultation in water sources, recharge, discharge and water regulation areas, highlands, wetlands, forests protectors, and fragile ecosystems in the province of Azuay must be cancelled?
The company previously reported a prior application request submitted by the same individual to the Constitutional Court to hold a proposed referendum related to mining activities within the province of Azuay and the results thereof (see press releases dated July 31, 2019, and Sept. 18, 2019). The Constitutional Court of Ecuador considered and denied the application, stating it did not meet the required criteria to proceed.
The question posed in the prior request was:
- Do you agree with the ban, without exception of prospecting, exploration and exploitation activities of metal mining in water sources, recharge, discharge and water regulation areas, badlands, wetlands, protective forests, and fragile ecosystems, in the province of Azuay?
The Constitutional Court in its press release of Sept. 17, 2019, stated that it "will carry out a formal and material control, case by case, regarding the origin of popular consultations on metal mining, analyzing whether these violate rights or imply reforms to the constitution, and if they meet the requirements of loyalty, clarity and transparency required by law to guarantee the rights of voters."
INV Metals, along with other international and Ecuadorean mining and exploration companies, holds legally granted concessions within Ecuador, and it will continue to work together with both the government and the mining industry to promote the significant benefits of responsible and sustainable mining development and to defend its legally granted mineral rights.
About INV Metals Inc.
INV Metals is an international mineral resource company focused on the acquisition, exploration and development of precious and base metal projects in Ecuador. Currently, INV Metals' primary assets are: (1) its 100-per-cent interest in the Loma Larga gold exploration and development property in Ecuador, and (2) its 100-per-cent interests in exploration concessions in Ecuador, including the Las Penas, Tierras Coloradas, La Rebuscada and Carolina exploration projects.
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