Ecuador election positive for mining

The outcome of the 15 October run-off between first-round winner Luisa Gonzalez of the Movimiento Politico Revolucion Ciudadana party backed by former president Rafael Correa and Daniel Noboa of Accion Democratica Nacional, the son of a banana tycoon, is expected to be positive for the mining sector, with both candidates supportive of foreign investment and recognising the need for it to grow."We were pretty comfortable that we were going to have two candidates that represented a continuity of the pro-mining policy stance of the country going into the runoff," Daniel Earle, chief executive of copper explorer Solaris Resources, told Mining Journal.As the Correa party candidate, Gonzalez was a clear favourite to win the first round. Her party has spoken about continuing the policies and large-scale development in Ecuador that Correa promoted to be able to continue to fund increased social spending.A decade ago, Correa advocated for reducing the country's reliance on oil income. In 2014, he implemented reforms facilitating large-scale mining development, which resulted in the development of the Mirador copper mine and Fruta del Norte gold mine. His government was also the last to award exploration concessions in Ecuador."The part that was unexpected was the rise of Daniel Nuboa. He performed extremely well in the debate. He is aligned with the business sector, a former member of the National Assembly and the Economic Development Commission. His platform is focused on fostering job creation, tax reform and bringing foreign investment," said Earle.YasuniThe first round of the presidential election also saw a nationwide referendum on whether to continue oil exploitation from the Yasuni area in the Amazon in eastern Ecuador, with the majority of people voting to stop it. Ecuador produces around 50,000 barrels daily, representing up to US$1 billion in annual revenue that the country would need to replace somehow.All the presidential candidates acknowledged that the future government would likely lose this revenue source and that the hole in the treasury would need to be filled. Many see mining as the main choice to step up."Nuboa stated the obvious, that the lost revenue from the oil sector is going to have to be made up by increased growth and accelerated growth in the mining sector. It is a welcome message.""You have recognition among the voting public, certainly reflected in all of the candidates in the first round, tacitly acknowledging the need for greater resource sector development to support the demands for job creation and economic opportunity," said Earle"Even Yaku Perez, considered the environmentalist candidate, who in his days as an Azuay Prefect, led the charge against mining in that province, his platform had a more moderate message, talking about restricting mining only in the most sensitive environmental areas and acceptance of it where it has the consent of communities," added Earle.Lasso's last actsThe outgoing administration of Guillermo Lasso has sought to advance mining projects as much as it can in its last months. Ecuacorriente received an amended permit to expand its Mirador operation from 20Mtpa to 46Mtpa within a permit that allows for 50Mtpa. It renewed SolGold's concessions and signed an exploitation agreement with the copper-gold developer and an investment protection agreement with Dundee Precious Metals for the Loma Larga gold project.However, president Lasso's attempt to move everything with his signature has been restrained. The president issued a decree to regulate the environmental consultation process in June, which the Constitutional Court suspended two months later."Outgoing president Lasso was advancing legislation by decree, but it is subject to Constitutional Court oversight. On some questions, the Court has intervened and said it is the business of the Assembly and needs to be passed through legislation, so that will have to wait until the new Assembly is seated. These are really timing issues," said Earle.WarintzaAt Warintza, Solaris expects to issue a resource update towards year-end as it has doubled the size of its drilling database since it issued its maiden 579Mt grading 0.59% copper equivalent indicated resource at Warintza Central in April 2022, with another 887Mt grading 0.47% inferred.The company has since drilled out the northeast extension of the high-grade starter pit at Central, and the adjacent Warintza East deposit. In May, the company confirmed the discovery of a second porphyry centre at Warintza East with a potentially higher grade and a new discovery to the southwest called Patrimonio. "These are some positive surprises that are very exciting but are not going to be captured by the next resource estimate," said Earle.FinancingSolaris has US$15 million in cash, and while this is sufficient to fund the company into 2024, it is starting to put together its next financing."We are specifically focused on non-dilutive or minimally dilutive sources of capital. We've got some firm options we are looking at, and you'll see some news from us in the coming weeks … among the the strategic options, we are advancing discussions around. No one is a larger shareholder of the company than the management team so we are very sensitive to dilution and valuation," said Earle.

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