Canada’s Adventus Mining (TSX-V: ADZN) and Salazar Resources (TSX-V: SRL) have reached a preliminary investment protection agreement (IPA) with Ecuador’s government for their Curipamba-El Domo copper and gold project.
As part of the deal, the partners have committed to investing $270 million over the next 12 years at the project. The figure doesn’t include the $50 million both miners invested up to the end of 2021.
In return, Adventus Mining and Salazar are asking the government for certain guarantees, such as the security of title and investment, reduced tax burdens on both income taxes and the capital outflow taxes and help with infrastructure development, among other items.
“The IPA is another significant milestone in the development of the Curipamba-El Domo Project,” Adventus President and CEO Christian Kargl-Simard said in the statement.
“Adventus Mining and Salazar continue to transparently earn the support and cooperation of the national Government of Ecuador, local government representatives and project communities to realize the project’s benefits for all stakeholders,” he noted.
The news comes on the heels of the companies’ reception of the government’s environmental and social impact assessment approval.
The technical endorsement paves the way for the citizen participation process, final environmental licence issuance and construction decision in the second half of the year, the miners said.
Pre-construction work is expected to begin in the fourth quarter of this year and full-scale construction in the second quarter of 2023.
Once built, Curipamba-El Domo will be the third operating mine considered key by Ecuador’s government. To date, the country’s only two producing assets are Mirador copper mine, run by China-backed Ecuacorriente and Lundin Gold’s (TSX: LUG) Fruta del Norte gold mine.
Locals will be employed during the construction and development phases of Curipamba-El Domo, with nearly 400 permanent jobs created during operations.
The project is also expected to bring $376 million in taxes and royalties into the state’s coffers over the 10-year mine life outlined by the completed feasibility study on El Domo, which does not include the additional development of underground resources identified, the companies have said.