Curipamba: Ecuador's third industrial-scale mine

The US$250mn Curipamba copper-gold project, owned by Adventus Mining and Salazar Resources, is expected to be the third industrial-scale mine in Ecuador, after Fruta del Norte and Mirador.

According to the Canadian-listed companies, construction should start at the end of the year and production in 2025 with average annual output of 10,463t of copper and 21,390t of copper equivalent over a 10-year mine life during the open put phase.

BNamericas talked with Freddy Salazar, corporate development manager at Salazar Resources, the only mining company of Ecuadoran origin listed on the Toronto Stock Exchange.

BNamericas: The environment minister announced that he will start an environmental consultation for the project. What are your expectations in this regard?

Salazar: That's right. It’s estimated that the environmental consultation process may last 77 days and there may be a few additional days to review the results.

We estimate that it will take around 100 days in total to obtain the environmental license; that is to say that in October we would have it.

BNamericas: Regarding the schedule, there is a delay in the start of construction of the mine.

Salazar: It’s true that we’re behind because initially in our schedule we planned to start construction in August, but the delay is not that great either.

Initially it was thought that the environmental consultation could last up to six months. We always calculate extra time to have rational expectations.

We’re a bit behind, but we hope to start construction in October.

BNamericas: Will construction or pre-construction activities start in October?

Salazar: Although we are legally empowered to carry out minor activities such as the camp, we prefer to start construction when we have the environmental license, which we hope will be in October.

We’ve already arranged the financing with funds from Wheaton Precious Metals, Trafigura and Adventus Mining.

Curipamba is profitable and gives some space for more debt to do project finance.

We have to thank our partner Adventus, since it has done everything to finance the project and with the best sources.

Wheaton’s financing at one time seemed a bit expensive, but today, with the level that interest rates are, you don't find financing as competitive as we have.

BNamericas: Could the political situation in Ecuador influence the project?

Salazar: It’s true that political times are complex, but we’ve complied with all the regulations. The lack of regulations for environmental consultation delayed several things in the country.

Now with the regulation and with the environmental consultation, the issues should flow smoothly.

We will support whatever is necessary so that the environmental consultation that the environment ministry must carry out is done in the shortest possible time.

We believe that there will be no problem because the communities are interested in the development of the area.

There are 800 direct jobs that the project will generate during the construction stage and 300 for operation.

BNamericas: How long will it take to build the mine and other facilities?

Salazar: We hope 18 months, although it could be extended a little longer.

We expect to have the asset in production in 2025, generating cash flow for the two companies.

BNamericas: Apart from the mine, what other facilities will be built?

Salazar: Among other works we basically plan the processing plant, the tailings dam and road infrastructure.

BNamericas: What will the water treatment be like?

Salazar: We don't foresee taking a lot of water from the streams, since Ecuador has high rainfall, so we will have the possibility of using rainwater. We’re pondering several pumping stations for water, 98% of which will be recirculated.

BNamericas: What will be the main benefits for the area where the project is located?

Salazar: Much of the financing will go to labor, another important part to local suppliers and that, obviously, will boost the economy of Las Naves canton, where the project is located, and of the entire province of Bolívar.

Just considering the taxes we think that the budget of the local government of Las Naves can be increased by at least four times.

There will be a lot of development for the entire area of influence of the project.

Compared to Fruta del Norte and Mirador, we are a relatively small project, but we will increase the country's mining exports by at least 10%.

We expect sales of US$200mn on average in the first years of production.