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Ecuador court revokes Cornerstone Capital’s exploration permit

Sample collection at the Rio Magdalena project. (Image courtesy of ENAMI.)

Ecuador’s Constitutional Court has backed the revocation of the environmental permit for Canada’s Cornerstone Capital Resources (TSX-V: CGP)(OTCMKTS: CTNXF), which has been exploring in the country since 2005.

The court upheld a lower court ruling that invalidated the company’s environmental rights for the Rio Magdalena project, located in the northwestern part of the country and which cover most of the Los Cedros natural reserve.

Cornerstone Capital and Ecuador state mining company (ENAMI) were jointly exploring the Los Cedros area, which holds three of the nine concessions within the alliance. A subsidiary of the Canadian miner has the option to earn up to an 84% interest in them.

Work at Rio Magdalena has been suspended since March 2021, pending a decision by the Constitutional Court of Ecuador, following a challenge filed by ENAMI to a lower court decision.

Cornerstone is now consulting with legal counsel to determine what rights and remedies it may have.

The state’s miner argued that the lower court erred by seeking to impose a requirement for prior environmental consultation, when the Ministry itself does not require such process so early in the exploration phase.

The miner also has a 20.8% direct and indirect interest in the giant Cascabel copper project.  

Shares in the company fell 10% in New York on the news, trading at $2.25 each at the opening. On December 31, the stock closed at $3.30. Its current market capitalization sits at C$153.22 million.