Ecuador 'sending wrong message' by cancelling mining concessions, Canadian consultant says – people of Ecuador, Guatemala, Peru & Chile disagree

TORONTO - Ecuador is "sending the wrong message" to international mining companies by cancelling more than 500 mining concessions without starting a dialogue between government leaders and company stakeholders, a Canadian mining consultant says.

If the South American country doesn't "recognize the fact that there's an extended group of stakeholders, then you can never come to any kind of reasonable consideration," said Luke Penseney, CEO of Markets Intelligence in Mississauga, Ont.
"You risk becoming a pariah, which is what Ecuador's in danger of becoming." (which is fine with the people who live on the land)

The Canadian Mining Industry in Guatemala

Last week, Ecuador's government announced it had cancelled the mining concessions because certain companies neglected to pay a US$1 per hectare environmental conservation fee due at the end of last March.

While the country declined to name which companies were specifically affected, several Canadian miners with properties in Ecuador issued press releases letting investors know they were safe.

Ascendant Copper Corporation (TSX:ACX), Dynasty Metals & Mining Inc. (TSX:DMM), Plexmar Resources Inc. (TSXV:PLE) and Aurelian Resources Inc. (TSX:ARU) all put out statements Friday saying they have paid all necessary fees.

Ascendant's shares regained some of the ground lost on Friday, when they fell 28 per cent. They closed Monday at 17 cents, up two cents from Friday's close but down from 21 cents at Thursday's close.

The Canadian Mining Industry in Peru

Reports suggest that two of Ascendant Copper's concessions have been revoked, a suggestion the company denies..

"Ascendant has received no notification of annulment from the Government of Ecuador or the Ministry of Mines and Petroleum, nor is it aware that any such notification exists," the company said in a release.

Ascendant claims that it has met all payments, though the government had already told the company it must stop operations at the project because it had gone against certain regulations.

"The market is already nervous about Ecuador's ongoing overhaul of mining policy," wrote Eric Zaunscherb, an analyst for Haywood Securities wrote in a note.

Some analysts are speculating that the problem could deepen.

"We're expecting . . . that they're increase concession taxes and maybe even require minimum expenditures to maintain that your property is in good standing," said David Stein, an analyst at Cormark Securities.

The Canadian Mining Industry in Chile

On Monday, Dynasty Metals rose three per cent, or 27 cents to $7.54 and Plexmar was up a penny to 14 cents at the Toronto Stock Exchange while Aurelian's shares closed at $8.10, down 19 cents from Friday's close.

Stein said despite the recent news, miners based in Ecuador still have it good.

"When you compare Equador to Peru or Chile or even North America, it's one of the cheapest places to operate right now. There's really no reason for that to be the case going forward," Stein said.

Ecuadorian government officials have been feeling pressure from environmentalists to tighten controls over its concessions because some said they were handing out too many agreements with foreign-based companies.

Some environmentalists also expressed concerns that the miners were polluting drinking water, which has been denied by the corporations.

It always is: Ok Tedi Environmental Disaster

"The government is responding to societal pressure, which is quite reasonable, but what it's not recognizing is that there are a group of stakeholders who include resource developers," Penseney said.

It's "the worst possible scenario other than to kick people out."

Here is the full article.

Peru to sign freetrade pact with Canada - set to become next victim of Canada's predatory mining industry?

Canadian Mining Company, Skye Resources, Burns Out Indigenous Mayan Villagers in Guatemala

OTTAWA -- Canada plans to announce today that it has wrapped up negotiations on a free-trade agreement with Peru, as the Harper government tries to gain ground in the global race to clinch preferential access to new markets.

The deal is Canada's second free-trade agreement in South America, after Chile, and gives Canadian businesses more unfettered access to a fast-growing continent.

International Trade Minister David Emerson expects to announce that a deal has been reached when he meets his Peruvian counterpart during World Economic Forum meetings in Davos, Switzerland, his office said.

Two-way annual trade with Peru is about $2.4-billion and the South American country is an important destination for Canadian capital, with about $2.9-billion invested in sectors such as mining and banking.

The Peru deal is Canada's second new free-trade deal in seven years, as the Harper government tries to catch up in the rush to sign free-trade agreements as global efforts at the World Trade Organization continue to flounder.

Previous Liberal governments began talks on at least seven new free-trade agreements and several investor protection deals. But they completed few; the last free-trade agreement they signed was with Costa Rica in 2001.

Mr. Emerson is also in Davos to formally sign the first free-trade deal the Harper government reached last year with Norway, Switzerland, Iceland and Liechtenstein, all members of the European Free Trade Association (EFTA) and countries that don't belong to the 27-nation European Union.
The new accord could still be derailed if the Harper minority government doesn't get at least one opposition party to back the deal in Parliament.

Business groups hailed the two deals.

(Here is why: Canadian Mining Industry Run Amok)

"By improving market access for Canadian exporters and enhancing protection for Canadian investments, these agreements will benefit companies and workers in a wide range of sectors," said Thomas d'Aquino, head of the Canadian Council of Chief Executives.

Here is the full article.

Bre-X Geologist Says Mine Might Contain Gold - Greatest Fraud in Canadian Mining Industry History Still Making Headlines

[September 17, 2007] TORONTO -- Ending a decade-long silence about the Bre-X scandal, John Felderhof has offered to go back to the company's infamous Indonesian mine to determine whether it contains gold.

"I can only hope that one day someone will go back and re-evaluate the property," the former Bre-X geologist wrote in a Sept. 12 letter, which his Toronto lawyer Joe Groia sent to reporters on Monday. "I remain ready and willing to help in any way that I can."

But Strathcona Minerals Services Ltd. -- which wrote a report blasting Bre-X's mineral testing program and warned of an unprecedented fraud - made "sweeping generalizations" that destroyed any chance to "determine the true extent of the ... deposit" at Bre-X's Busang property, Felderhof said.

Groia backed up his client, saying that Strathcona never tested survey results at the so-called central zone, where local miners were digging when the Canadian lawyer sent a survey crew there about six years ago.

Strathcona's president Graeme Farquharson took exception to Felderhof's comments, arguing that the mine has no real value.

"That's the position we still hold," he said in an interview Monday. "I'm just annoyed that he'd want to stir up the hornet's nest again. He has his liberty. I'm curious as to why he felt the need to issue a statement like this."

Meanwhile, the two-page letter took a swipe at the Ontario Securities Commission and warned that no amount of regulation could have prevented the fraud that wiped away more than $6-billion worth of investors' money.

Felderhof, the only former Bre-X official to ever face criminal charges, was acquitted of insider trading this summer after a trial that dragged on for six years.

"I have always maintained, and now the court has found, that the tampering that took place at [the mine] was 'unprecedented in the history of mining,'" he wrote. "It is my firm belief that no amount of regulation can be put into place to prevent a sophisticated and well-planned fraud.

"I do hope that the next time a case similar to Bre-X comes along, the regulators and the Strathconas in Canada will take a good hard look at the facts before rushing to a hasty judgment, destroying whatever shareholder value might still be saved."

His comments echo those of Justice Peter Hryn, who cleared Felderhof on July 31 of insider trading and issuing false press releases about the amount of gold at Bre-X's Busang property.

In a 594-page decision, Judge Hryn said that the company's top geologist wasn't the only person to miss "red flags" hinting that the gold mine was a hoax.

In his last public statement on July 25, 1997, Felderhof dismissed suggestions that he should have been aware of the so-called red flags.

Thanking his lawyers and defence witnesses for their "courage in testifying on my behalf," Felderhof described the case as a "lonely, lengthy and difficult battle."

Here is the full article.

More on the out of control Canadian Mining Industry: Canadian Mining Industry Run Amok

"Chile is the best mining jurisdiction in the world... Canada is not a jurisdiction where I would like to develop a mine." says Centenario Copper CEO

Risk not a factor in this offer

Maybe having a former investment banker running a company is the best way to ensure investors are protected in the event that things don't work out properly.

Or maybe the same level of protection can be achieved by having a chief executive decide the risk should be borne by the company -- and not by the investors.

Whatever the source, investors in a US$80-million private placement done for Centenario Copper Corp., were protected in the event the issuer didn't receive the necessary permits. Centenario was formed in 2004 and operates in Chile.

"I didn't want us getting caught in the position where we were seen to be bagging investors," said Richard Colterjohn, chief executive of Centenario and a former investment banker with UBS Securities.

In July, Centenario raised US$80-million by selling 16 million special warrants at US$5 per warrant. The capital was raised after the company completed a bankable feasibility study. "I am very interested in speed of execution. So rather than waiting around to do a prospectus and then do a traditional IPO structure, we did a special warrant financing to accredited investors and gave an undertaking that we would become publicly listed within 120 days," added Colterjohn in a phone conversation from Chile last week.

(Canadian law allows this, sadly to the detriment of the host countries: 10 Things Canada Does Best - What Canada doesn't do best is hold domestic mining companies accountable for the damage they do abroad. , Canadian Government Urged to Rein in Mining Sector , Mining Misery: Guatemala is one of many countries that has attracted the investment of Canadian Mining Companies – but at what cost to its people? )

But releasing the proceeds from that financing was made conditional on getting a final Environmental Impact Statement approved, said Colterjohn, noting that despite giving the investors an out in the event that the permit wasn't received, he remained confident it would be.
"As far as I am concerned, Chile is the best mining jurisdiction in the world and we were highly confident we would get it. In fact, we did get it before we closed the financing."

(Mining is so good in Chile that the National Intelligence Agency (ANI) monitors all environmental NGOs that oppose mining: ANI or DINA? Environmental organizations protest espionage and infiltration by Chilean Intelligence Agency , Legislators angered by Chile Intelligence Agency monitoring of environmental organizations - investigation demanded , Chile Intelligence Agency Monitors Environmental NGOs )

Colterjohn, whose company's shares have been trading since mid-October following the receipt of a prospectus to clear the private placement, said that approach was adopted because he "was completely prepared to eat that risk in order to minimize that dilution. And I got better pricing for doing it," he said. The reason: with permitting risk not a factor, investors could focus on the merits of the company's copper project, knowing that in the event the permit wasn't received, they would get their money back--plus a tad more.

"It was a decision that [the permitting] risk belonged with us rather than with the investor and, thereby, we gave them greater comfort," he said.

Colterjohn was asked about the lack of a similar out in a $200-million financing done in March for Gabriel Resources, a company with a gold project in Romania -- but no permit. "It's an incredible geological potential, but you have a bunch of locals who don't want you. Mining has to go where it's wanted, and I am where I am wanted," he said.

(Read more about Gabriel Resources and Romania here: Canadian gold mining corporation, Gabriel Resources Ltd. halts Romanian project as support sours - NGO's influence cited , Battle over gold mine plan that would create giant cyanide lake. , Mine Your Own Business - The Darkside of the Environmental Movement? - watch the groundbreaking video trailer below )

He was asked what he would have done had he been running Gabriel and decided to raise $200-million. "The reality is that there is permitting risk. From the company's perspective, it was more important to get the funds in and to continue to drive the project forward and to continue to develop support. Mining people by nature are optimistic and believe that sooner or later they will get there. But it's a judgment call," he said.

Colterjohn was asked about permit risk in Canada. He replied, "Canada is not a jurisdiction where I would like to develop a mine."

(Naturally, countries with weak governments and environmental laws attract miners: Chile's Government fines itself for polluting the environment . Compare that to what recently happened to a number of US paper companies : US Environmental Protection Agency forces paper companies to begin $400 million clean-up project to deal with PCBs in the Fox River . )

Here is the full article.

Canadian Uranium One's dam bursts in South Africa

Canadian miner Uranium One Inc. said on Monday that a storm water containment at its Dominion Reefs uranium mine in South Africa burst over the weekend after 58 millimeters of rain fell on the area in 30 minutes.

The company said it repaired the damage, and estimates that about 100 megalitres of water was discharged into a nearby stream that feeds the Vaal River.

"Based on initial water sampling and analysis," the company said in a statement, it "does not expect any environmental impact due to the discharge." (There never is, and thankfully it did not occur in Canada.)

Here is the full article.

Canadian Government Urged to Rein in Mining Sector

Canadian mining companies continue to come under scrutiny from civil society organisations for international human rights violations and environmental damage that critics say the Canadian government has done little to check.

Canada is a leader in the global mining industry, with almost 60 percent of the world's listed exploration and mining companies. The government supports some foreign mining activity through Export Development Canada, a federal agency.

"The situation is pretty grim," Joan Kuyek of Mining Watch Canada told IPS. "The mining companies are engaging in predatory activities. The laws and regulations don't stop violations of human rights or protect the environment. There needs to be immediate regulation of mining companies."

According to the Halifax Initiative, a coalition of labour and civil society organisations pushing for policy reform, Canadian mining companies have "been implicated in well-documented cases of human rights violations and environmental abuses ranging from the destruction of protected areas, to death threats and assassinations."

(Here are some examples: Mining Misery: Guatemala is one of many countries that has attracted the investment of Canadian Mining Companies – but at what cost to its people? , 10 Things Canada Does Best - What Canada doesn't do best is hold domestic mining companies accountable for the damage they do abroad. , Canadian, Goldcorp's open pit, cyanide-leeching mine runs up against local opposition in Guatemala , Canadian Barrick Gold Corporation Pascua Lama Project Protested - Al Gore insisted upon removing Barrick Gold as a sponsor of his May visit to Chile. )

In 2005, the Standing Committee on Foreign Affairs and International Trade for Canada recommended the creation of "a process involving relevant industry associations, non-governmental organisations and experts, which will lead to the strengthening of existing programmes and policies in this area, and, where necessary, to the establishment of new ones."

Another report written last spring, entitled "National Roundtable on Corporate Social Responsibility and the Canadian Extractive Industry in Developing Countries", also recommended a corporate social responsibility framework.

But even as Prime Minister Stephen Harper has refocused the nation's foreign policy agenda toward Latin America, a major source of Canadian mining investments, there has been little movement to implement these recommendations.

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The Canadian government has traditionally relied on voluntary compliance. There is still no commitment to establish legal norms in Canada to hold Canadian-based mining companies to account for violations overseas or to ensure that reporting is made available to markets and shareholders.

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In July, during a trip to Latin America, Harper met with officials from the company Barrick Gold, whose operations in Tanzania and Chile have come under fire for alleged labour and environmental violations.

Lucio Cuenca, of the Latin American Observatory on Environmental Conflicts, said at the time, "It is inappropriate that the prime minister meet with and give his support to the company at a time when the Chilean Congress is considering whether to investigate suspected irregularities in the Pascua Lama Project, the State Defence Council of Chile is contemplating suing Barrick for the destruction of glaciers, and a complaint regarding the project that was submitted before the Inter-American Commission on Human Rights is pending."

The Pascua Lama gold deposit being pursued by Barrick Gold is located in the Andes in an area rich with glaciers. Glacial run-off irrigates the productive Huasco valley, an agricultural center just south of the Atacama desert. The indigenous Diaguita community of Huasio-Altino claims that the concession includes part of its ancestral territory and is suing to recover the lands.

Here is the full article.

10 Things Canada Does Best - What Canada doesn't do best is hold domestic mining companies accountable for the damage they do abroad.

Excerpted

In a 2005 series called "10 Things Canada Does Best," The Globe and Mail declared Canada a world leader in raising capital for mining ventures. Mining companies raised U.S. $4.2 billion on Canadian stock markets in 2005, and 85 percent of mining deals done worldwide that year were based in Canada.

According to the Department of Foreign Affairs and International Trade (DFAIT), almost 60 percent of the world's mining and exploration companies are listed on the Toronto Stock Exchange or the Calgary-based TSX Venture Exchange. Canadian mining companies account for over 40 percent of global exploration budgets and nearly 3,200 concessions in more than 100 countries.

What Canada doesn't do best is hold these domestic mining companies accountable for the damage they do abroad.

The tale of Chichipate, a Guatemalan village whose fate is controlled by a Canadian company, is a study in the harm done by Canada's mining sector in developing countries. It's a story that traces the origin of one source of Canada's wealth and calls into question Canada's self-image as a champion of human rights.

The strength of the Canadian mining sector has its cultural roots in our traditional identity as hewers of wood and drawers of water. Our history as a resource-based economy has created a cadre of geologists, mining engineers, managers, investment bankers, industry analysts and brokers with technical expertise in mining.

But there are also structural reasons for Canada's dominance. "It's relatively easy to float a mining company on the TSE," says Jamie Kneen, communications co-ordinator for Mining Watch, an Ottawa-based NGO that monitors the Canadian mining industry. "The information requirements are lax compared to the United States." The New York Stock Exchange has stricter disclosure requirements about the environmental impact of a company's operations, and it forces companies to abide by U.S. accounting rules, which are more exacting than Canada's regarding how companies place a dollar value on mining assets.

The website of the Mining Association of Canada boasts about Canada's lenient disclosure requirements. The TSX rules, it says, are "designed around the needs of the mining industry."

As a bonus, Canada has tax loopholes that benefit companies incorporated in Canada, with operations abroad. To avoid the possibility of double taxation, companies are assumed by the government to be paying taxes in the countries in which they operate. But because many companies make arrangements with host countries not to pay taxes there either, they don't pay taxes anywhere.

Here is the full article.