Shares of Eco Oro Minerals Corp. (TSX:EOM) plunged over 50% on Tuesday to $94 cents in early trade after Colombia’s national mining agency scrapped most of its concession on environmental grounds.
The organization ruled that only 46% of its concession at the Angostura gold project is eligible for extension. The remaining 54% cannot be extended because it is in an environmentally sensitive area — and that area holds 70% of the actual 2.7 million ounce gold deposit that has been the focus of an anti-mining campaign in Colombia and abroad.
Colombian authorities argue the deposit is located an environmentally protected area called the Santurban páramo.
But Eco Oro said it is contesting the decision. The definition of a páramo, alpine tundra that are protected under Colombia law, is one of the major issues being fought over.
Opponents of Eco Oro, including Canadian anti-mining NGO Miningwatch, claim that the Angostura project would impact the Santurban páramo, which they describe as fragile, and also say mining there would imperil a supply of drinking water that comes from it.
Today’s ruling is the latest of many setbacks that Eco Oro (previously known as Greystar Resources) has faced as it tried to get Angostura developed. The company has worked on the project for more than 17 years, but failed to get enough government and local community support.