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Newcrest ups stake in Ecuador with Cornerstone deal

Camp at Cascabel copper-gold project, 180 km north of the capital Quito. (Image courtesy of SolGold.)

Australia’s largest gold producer, Newcrest Mining, (ASX: NCM), is expanding its footprint in Ecuador by signing an agreement with Cornerstone Capital Resources (TSX-V:CGP), a Canadian junior with several assets in the country, including a 15% stake in SolGold’s Cascabel copper-gold project.

Under the deal, a subsidiary of Newcrest will have the option to earn up to a 75% interest in two early-stage gold, copper and silver projects — Caña Brava and Tioloma, located in south-central Ecuador.

The Aussie gold miner would be the operator of the proposed mines in phase one, which extends to 18 months after receiving a drill permit.

Newcrest will have the option to earn up to a 75% interest in two early-stage gold, copper and silver projects —  Caña Brava and Tioloma.

Newcrest already owns a 27.1% interest in Lundin Gold (TSX:LUG), the company behind the Fruta del Norte gold project, and has an agreement to form a joint venture to explore eight early stage concessions near the mine.

It also holds a 15.3% interest in SolGold (LON, TSX:SOLG), which is developing the Cascabel copper-gold project in the country’s north. Its new partner, Cornerstone, has a 15% interest in Cascabel, but SolGold is working hard to put an end to that.

Last month, SolGold revealed plans to acquire Cornerstone and to tighten its grip on the potentially world-class project.

Ecuador has gained ground as a mining investment destination over the past two years, with top miners entering into joint ventures or investing in juniors to gain exposure to projects in that country.

Anglo American (LON:AAL) also landed in the South American nation through a deal with Canada’s Luminex Resources (TSX-V: LR). The company plans to develop two copper and gold concessions there.

Currently, Ecuador’s emerging mining sector employs 5,000 people, but estimates the figure will rise to about 16,000 by 2020.