Luminex reaches ‘historic’ agreement with informal miners around Ecuador gold project

Following a series of negotiations, Luminex Resources (TSXV: LR, OTCQX: LUMIF) says it has reached “a historic and unprecedented” mediated agreement with informal […]
Credit: Luminex Resources

Following a series of negotiations, Luminex Resources (TSXV: LR, OTCQX: LUMIF) says it has reached "a historic and unprecedented" mediated agreement with informal miners in the Condor North portion of its Condor gold project in southeast Ecuador.

The agreement was signed with Minera La Pangui SAS, the local entity that incorporates members of the neighbouring informal mining associations, including 19 mining operators, most of whom hold historical operating permits granted by the Ecuadorian government within the Condor project.

These artisanal mining permits are currently approaching expiration, a condition which has generated concern among the shareholders of the local entity regarding their future prospects as the Condor project advances.

For the Condor project to advance successfully towards production, Luminex believes that a sustainable solution to the issues with the informal mining groups had to be found. Negotiations towards an agreement began in February 2022, led by a "highly regarded professional mediator."

According to Luminex, the agreement enables the company to secure areas in proximity to Condor North, and at the same time, satisfies the decades-long desire of these informal artisanal miners to gain legal mineral concession rights over informal mining properties in the company's Chinapintza area.

Specifically, the company has agreed to divide its Chinapintza concession into four new mining titles, one of which (La Pangui, 53 hectares) will be transferred to the local entity. The transfer of this title, Luminex says, will ensure that the informal miners have "legally secure and long-term mineral concessions, along with the obligation to obtain all the regulatory and environmental permits and licenses necessary for the mining operations."

This was possible, because, based on past exploration and technical studies, the company determined that these areas were not required for the development of the Condor project, now or in the future, it adds.

Once the transfer of the mining title is completed, the local entity will grant Luminex a voluntary mining easement for the duration of said mining title and its renewals and extensions. This easement will cover a portion of the concession that, due to technical and industrial safety considerations, the company may require when the Condor project is at a more advanced stage.

As part of the agreement, the local entity and the five directly affected shareholders have agreed that they will over time abandon certain current operations in this area, which will be necessary for industrial safety.

In addition to relinquishing their permits and committing to not request any new rights or undertake operations in any areas where the company has mining rights, the shareholders of the local entity have agreed to collaborate with the company to help restrict the entrance of illegal miners to the concessions of the Condor project.

The local entity and their shareholders will also commit to conduct environmental audits that may be requested of its operations, as well as to remediate any environmental impacts their operations may have caused and assume responsibility for any environmental liability that may arise as a result of their past activities.

They will also grant the company a right of first refusal over any future sale of the mining title, and commit that if this right is not exercised, any future purchaser of the mining title will commit to abiding by the terms of the agreement.

According to Luminex, this agreement is "unprecedented in Ecuador and will serve as a model to be replicated in other projects facing development challenges from artisanal mining operations."

The Condor project is located in Zamora-Chinchipe province, about 35 km south of the Fruta del Norte mine held by Lundin Gold. Condor North represents a recently discovered area containing multiple open pit deposits that are expected to produce 187,000 gold and 758,000 silver annually over a 12-year life.

Shares of Luminex closed Tuesday's session 4.5% higher following the agreement announcement. The Vancouver-based miner has a market capitalization of $40 million.



Your email address will not be published. Required fields are marked *