Osisko bogged down at same Argentina project where Barrick came unstuck
Osisko Mining on Monday said the company's Famatina project in La Rioja, Argentina, remains stalled almost a month after protesters began blockading the site and marched on the governor's office and in the capital Buenos Aires.
At the end of August last year, Osisko signed a deal with Energía y Minerales Sociedad Del Estado, the La Rioja State mining corporation whereby Osisko agreed to pay $500,000 and then invest $10 million over the next four years to conduct a feasibility study. Should it be built Osisko will receive a 70% stake in the Famatina mine.
Osisko insists that at this point in time Famatina, located in northern Argentina, is an exploration project only; there is no current plan, design or intent for any mining operations and the it has "made no significant financial investment in the project to date:
In the days immediately following the signature of the Agreement, groups from Famatina and elsewhere in Argentina commenced organized protests against what has misleadingly been called the "Famatina mega-mine project". In fact, the development of a mine is still highly hypothetical, since very little is known about the amount, quality and location of the mineral resources that may exist in the properties within the Famatina Project.
On January 2, protesters obstructed access to the Famatina Project site. As of today this blockade is still in place, and demonstrations have been staged in Famatina, La Rioja City and elsewhere in Argentina. Although this obstruction has not had any impact on field work, the protest activities have impeded MEP representatives in their efforts to make initial contacts with people living in the vicinity of the Famatina Project as part of the community information program for planning and preparation.
The area hosts the famous mining district of La Mejicana where workings situated about 4,700 meters over sea level, including a tramway system, date back to the 19th century. IPS news reports residents of the nearby towns of Famatina and Chilecito set up the roadblock on a dirt road leading up to the highest point of the mountain chain, Nevados de Famatina (6,250 metres above sea-level):
The activists maintain the Alto Carrizal roadblock day and night, but are selective in whose passage they block. Local residents and tourists are allowed through, while provincial authorities are stopped, along with anyone representing the Canadian company authorised by the Argentine government to mine the area.
Protesters are backed by a number of national and international environmental NGOs, including Fundación Ambiente y Recursos Naturales, Greenpeace, and Los Verdes, which in recent days voiced their concern about the activists' safety, reporting threats and harassment. Political parties from the opposition and celebrities are also stepping forward to support the anti-mining campaign.
PressTV (with video) reports union representatives, social and political organizations gathered at the Obelisk – Argentina´s national monument – in Buenos Aires for sympathy protests:
Banging saucepans in sign of protest and chanting “Water is not for sale”, they claimed mining activities would deplete scant water resources in an already dry region and seriously damage the environment and called authorities to stop the plans of “killing corporations” as they describe them.
Fox Business reports the governor of La Rioja, Beder Herrera, assumed office in 2007 after leading an impeachment effort against his predecessor amid allegations of fraud and corruption related to a deal with Barrick Gold to develop the Famatina site which Barrick eventually abandoned:
A number of companies are pushing forward with large mining projects in Argentina, but many have faced stiff resistance. About eight provinces have banned open-pit mining and the use of chemicals common in the industry such as cyanide, effectively putting them off limits to large-scale mining projects.
However, a number of other provinces, including San Juan and Santa Cruz, are strongly in favor of the industry. Earlier this month, Rio Negro province joined La Rioja in lifting a ban on open-pit mining and the use of cyanide.
But a strict federal glacier-protection law threatens to derail a number of projects by limiting economic activity in the areas surrounding glaciers.
Osisko (TSE:OSK) also operates the Canadian Malartic Gold Mine in Malartic, Quebec and is pursuing exploration on a number of properties, including the Hammond Reef Gold Project in Northern Ontario.
The company, worth $4.5 billion on the Toronto main board lost 3% or 37c to trade at $11.81 by early afternoon on Monday. Since the start of 2012 Osisko stock has enjoyed a strong run adding roughly 20%.