July 3 Update: Lawsuit Ruled Malicious, and other news
Friday, July 04, 2008
resumen mas adelante Latest from Intag: Ascendant’s new name; Lawsuit against Carlos Zorrilla declared illegal and malicious; The Constitutional Tribunal rules- too late- in favor of Ascendant. Upcoming lawsuit in Canada Ascendant’s new name In the past couple of years, Ascendant Copper Corporation’s shares have lost approximately 95% of their value, so it was only a matter of time before they would try to change their name, which is what they announced on June 27th (a decision apparently taken by a tiny percentage of its shareholders- most of them company officers). The proposed new name is Copper Mesa Mining Company. The company is waiting for regulatory approval. (http://www.canadanewswire.ca/en/releases/archive/June2008/27/c8603.html. If they are dreaming the name-change will help “clean up their image” and to make it harder to link the company to its dark past here in Ecuador, or for its officers to avoid criminal lawsuits in Canada, they indeed are dreaming. Lawsuit declared malicious. On July of 2006, Leslie Brooke Chaplin, a US citizen, accused Carlos Zorrilla of theft, assault and other made up things, during a completely peaceful public event, and in which hundreds of anti-mining protesters participated (and which was also filmed and monitored by police). The false charges led to arrest and search warrants and a police raid on Mr. Zorrilla’s home, violating a surprising number of laws and basic human rights. The 19 heavily armed police failed to find Carlos, but did leave behind a gun and a probable drug substance meant to further incriminate him in other criminal lawsuits (which, indeed, resulted in another arrest warrant). On July 3rd of this year, the judge overseeing the case finally ruled that the charges WERE MALICIOUS AND RECKLESS. This is the legal definition of malicious lawsuit: involving malice; characterized by wicked or mischievous motives or intentions. “An act done maliciously is one that is wrongful and performed willfully or intentionally, and without legal justification”. In other words, made up to cause harm; false without legal grounds. The ruling opens the way for Mr. Zorrilla to sue for libel and damages and to open a full-scale investigation to identify the company and/or individuals responsible for the orchestration and funding of this travesty of justice. This, by the way, is the same lawsuit in which Chaplin’s lawyer says he never met Leslie Brooke Chaplin and that his signature was forged on all the legal documents presented in the case. The lawyer is suing Chaplin for the equivalent of identity theft- an extremely serious criminal offense in Ecuador. Constitutional Court rules- too late- in favor of Ascendant. DECOIN recently found out the constitutional court threw out the case presented last year by the Ministry of Mines and Petroleum against Ascendant’s mining concessions in Intag. However, the ruling will not, in the least, affect Ascendant’s loss of its concessions under the resolutions taken by the National Assembly in April of this year, which annulled 88% of Ecuador’s mining concessions. We believe that Ascendant and its subsidiaries will lose all of its concessions in the country. And, stay tuned for some earth-shaking news related to an upcoming lawsuit in Canada.Resumen: El juez penal sentenciO que la demanda presentada por Leslie Brooke Chaplin en Julio del 2006 por robo en contra de Carlos Zorrilla fue maliciosa y temeraria, abriendo el camino a que Carlos enjuicie penalmente a Chaplin y se pueda realizar una investigacion para dar con los responsables reales del montaje judicial en contra de Carlos. Mientras tanto, Ascedandt Copper esta tramitando un cambio de nombre a Copper Mesa Mining Company, despues de que sus acciones habrían perdido cerca del 95% de su valor inicial en los ultimos años... Y, el Tribunal Constitucional sentenciO que la demanda de inconstitucionalidad presentada por el Ministerio de Minas y Petróleo el año pasado en contra de las concesiones mineras de Ascendant en Intag no procede- una resolución muy tardía, ya que la empresa perdiO sus concesiones en Abril de este anio por via del Mandato Minero, el mismo que anulO el 88% de las concesiones en el país.
Friday 13th News: Mining in Ecuador
Sunday, June 22, 2008
http://www.northernminer.com/issues/ISArticle.asp?id=85699&issue=06132008&ref=rssDaily News Friday, June 13, 2008 Ecuador update: many questions, a few answers Vancouver - On June 9th, fifty-two days after a mining mandate in Ecuador suspended all mining activity while the government drafts new mining legislation, the government began transferring the country's mining concessions to the state. The move, entirely expected as part of the new law, has been one of few clarities to surface about what the new law will mean for foreign companies working in the small South American country. The mandate of April 18th, supported by an overwhelming majority in the constitutional assembly, cancelled 88% of all concessions, limited companies' holdings to a maximum of three concessions, and suspended mining activity for 180 days. Since then, little else has been disclosed. Lawyer Raul de la Torre, partner in the leading Ecuadorian law firm Perez, Bustamante & Ponce, has been following the situation from within the country and in a recent article in LatinLawyer he outlined what he's managed to discern so far. Torre writes that administrative charges will increase to US$100 per mining hectare. It is unclear whether this refers to a one-time fee or an annual charge. Either way it's a considerable cost - Aurelian Resources' (ARU-T, AUREF-O) 95,152 mining hectares would cost the company US$9.5 million per payment, for example. Dynasty Metals & Mining (DMM-T, DMMIF-O) is in a similar position, holding 96,900 hectares that could cost US$9.7 million. A second new piece of insight from Torre is that the new law will include a 3% to 5% royalty. He describes the royalty as "payment to the state for exploitation of mineral resources." Whether the tax would be a net smelter royalty or take another form is not clear. Thirdly, Torres writes "any environmental damage from a mining concession would be cited as cause for contract termination." Since mining damages the environment by its very nature, this clause could give the government wide-ranging power to cancel mining rights and thereby take back deposits. In addition, the role of the state mining company being created under the law is still a subject of great debate. Torres says the national company will oversee development of any projects reserved for the state. The question is which those projects will be. One of the members of the national assembly who introduced the bill, Betty Tola, said in the past that the new entity would hold the concessions invalidated through the April mandate. That mandate declared all mining concessions in which there had been no exploration investment before the end of 2007 invalid. Similarly, any concessions for which no environmental impact assessment had been submitted by the end of 2007 were declared extinct as well as any concessions within natural protected areas. Finally, any concessions carrying unpaid fees were invalidated. There is to be no compensation for cancelled concessions. Concessions in those categories add up to 88% of the country's issued mining concessions. Until recently, however, the government had not formerly seized invalidated claims. According to Torre, the process of transferring invalid claims into the new national mining company has now begun. While that process sounds dire, in an April interview with Dow Jones Newswires Ecuadorian Mines and Oil Minister Galo Chiriboga rejected the notion of the new national mining company interfering with projects currently held by foreign companies. He indicated that the state-run company would focus on industrial mining, that is mining matter for construction materials such as cement. The three-concession limit remains another very significant point of confusion. The mandate officially limited any one person or company to holding only three mining concessions. Chiriboga has since suggested that this limit could be raised. The limit could disable many foreign companies from proceeding with their projects. Dynasty was slated to take its Zaruma gold project into production at the beginning of July; the 180-day mining moratorium delayed that, of course, but the three-concession limit could halt it permanently. Dynasty holds 125 concessions in Ecuador. Along the same lines, Corriente Resources (CTQ-T, ETQ-X) holds some two dozen concessions in the country, with its 25 billion lbs. of copper resource spread out among them. Aurelian's Fruta del Norte deposit is, luckily, situated on a single concession. That being said, the company holds 39 concessions in the area so as to control the possible deposit extensions. The questions are still far more plentiful than the answers but Torre's insight gives a window into the law under development. All should become clear when the new law is published on June 27.
Ascendant;s Ist Quarter 2008 Report: What the Company is Not Telling...
Thursday, May 22, 2008
Espaniol ya mismo.......... Ascendant's 2008 First Quarter Reports and What the Company is Not TellingAs expected, Ascendant's directors have risen to the occasion. The occasion being distorting and withholding information which might reflect badly on the company as reported on its latest quarterly report*. Loss of Concessions.The company does a great job of not admitting that the government basically took away their Junin mining concession (Golden 1 and Golden 2) This is what the company says in its latest report: "I n late January 2008, Ascendant received notices from the Regional Director of Mines, Province of Pichincha, that purport to nullify two concessions, the Golden 1 and Golden 2, that form part of the Junin copper/molybdenum project in Ecuador on the basis that these concessions were granted unconstitutionally". The government didn't 'purport' to nullify the concessions- it nullified them, plain and clear.... AND legally. Whether a higher court or the Ministry rule otherwise in the future on appeal is totally besides the point. What the company should have told its investors was that their concessions were abolished but that they were negotiating with the government, appealing, begging, threatening to sue, etc.- anything but that the government purported to nullify their concessions. So, legally, right now they do not own Golden 1 nor Golden 2. And even if they were to win in court some day, the Mining Mandate below assures that the concessions will stay out of their hands. The Mining Mandate.On its latest report, the company gives the impression that the Mining Mandate, approved by a 95-1 margin by the nation's Constituent Assembly on April of 2008, merely froze mining activities in the country. True enough, but the Mandate also abolished concessions rights - without recourse to payment- of 80% of the country's concessions- including Ascendant's and any other that: a) threatened water resources; b) was not up to date on its payments to the government; c) did not have an Environmental Impact Study approved, and it limits concessions to 3 concessions per company (including subsidiaries). This sure seems material in nature. The Mandate also called for the creation of a state mining company. Under the Mandate there is no guarantee whatsoever that the companies will recuperate their concessions once the new mining law is drafted. The law will set forth totally new conditions on which to grant mining concessions and approve mining activities, and they are bound to include payment of royalties, a high windfall profit tax, a higher income tax bracket for mining companies, much stricter social and environmental regulations, and a steep per-hectare registration fee. And, there's a very good chance the state-owned mining company will usurp the juiciest mining projects. The new law, by the way, cannot modify or be in conflict with the Mandate. In other words, a completely new ball game. As for the company not knowing too much about the Mandate, it claims that: "As Ascendant’s information on the new Mining Mandate has been substantially obtained from the press, the information provided by the Company is subject to uncertainty"This is a bit far-fetched. The complete text of the Mining Mandate was put on the Constituent Assembly's web page within days of its April 15th approval. Just in case the company doesn't know how to access it, here it is: asambleaconstituyente.gov.ec Search for Mandato Minero. www.informineria.org also has a copy of it, as well as many other sites (google has 9,950 references of it in English, and 29,000 in Spanish). Exploration? In Junin?The company, once again, claims that it has spent money on exploring in the Junin concessions. This is patently false. The last exploration that took place in the Junin area was done by Bishimetals, back in 1996. In case there is any doubt about the above statement, Ascendant Copper Corporation has not spent a single penny on exploratory activities in its Junin project. If you look back in the last few reports, you will find the company saying it has spent millions of dollars on this. Below is the latest claim: The Company used $1,745,000 in operating activities during the three months ended March 31, 2008, primarily for general and administrative expenses and exploration costs relating to the Junin and Chaucha properties (emphasis mine) The Problematic Junin Deposit (made more problematic by damn termites!!) On the latest report, the company makes reference to the Micon International's NI 43-101 report, which designated the Junin deposit to be four times larger than what the Japanese inferred through years of exploration. However, the company failed to inform the public in its latest report that Micon publicly said last year that it can no longer verify its claim, due to damage sustained to the original core samples by, among other factors, termite damage. If a company was, for some obscure reason, wanting to cover up misleading information it generated, this is a damn good way to do it (of course Decoin is not suggesting anything of the sort). The company also failed to inform the public that there a complaint was filed in Canada questioning the procedure used by Micon to assess Ascendant's Junin's mineral deposit. Loss of Properties.The company did not report the loss of 17 of its properties in the Junin area. The company permanently lost title to these lands, land which were sitting on top of the copper deposit, when the National Institute for Agrarian Development (INDA) legally abolished the company's ownership rights due to illegalities in the granting of the original land titles. Given that the company had said that part of their strategy to acquiring properties in the Junin area was to gain access to their concessions- this could constitute a material event. Those Pesky Obstacles.The obstacles listed above are just some of the many the company faces. For example, there is still the fact that most of the Junin concession is covered in primary cloud forests harboring dozens of threatened mammals, birds and amphibians (including the critically endangered brown-faced spider-monkey, jaguars, and spectacled bears). The area is also extremely rich in archeological sites. Under Ecuadorian law, mining in these areas is illegal. Others include the fact that there is just not enough water in the site or adjacent areas to undertake a mining project the size envisioned by Ascendant; the long-standing opposition by local governments and communities, and of course, the fact that there is a County government law that prohibits mining in native forests! Not to mention that the area above the minerals is not only in primary and secondary native forests, but that it has been managed and occupied by the Junin Community since 1997 and forms part of its community tourism project! Then there was Telimbela.... And Chaucha With nothing to show as far as real exploratory results, a mining mandate freezing all mining activities, no environmental impact study approved- nor likely in the near or mid-term future..... well, you get the picture. As for Chaucha:: no exploration can take place; and, if it hasn't already, the company may lose its concession. And wasn't it last year that the Chilean miner Antofagasta pulled out of the deal it had to develop this site because of very poor results? The Gall of it All...And, in the midst of this rapidly sinking ship, the company increases salaries and wages!!! Long live the spending of other people's money!! * The report can be dowloaded from the company's web page (ascendantcopper.com) investors section
Reflections on the Mining Mandate
Thursday, May 01, 2008
en espaniol cuando tenga un chance.. Reflections on Ecuador's Mining Mandate. It's easy to see why Canada's mining companies have spent so much money on publicity to try to lessen the public relations nightmare caused by the Constitutient Assembly's 95-1 passing of Ecuador's Mining Mandate, which annulled 88% of the country's mining concessions- including all of the big ones held by the Canadian companies. It's even understandable that Canada's Ambassador to Ecuador would go with a squad of Canadian mining company owners and managers to meet with Ecuador's president so publicly as they did last week. When there's so much at stake, anything goes. Just what is at stake? The Mining Mandate abolished 4,474 mining concessions by passing the Mining Mandate this past 15th of April; approximately 600 were left after the onslaught, most are small mines and medium non-metallic projects (cement and building materials). Not a single large-scale metallic mine project should be left standing if the Mandate is implemented as it was meant to be by the Assembly. The main parameters for the abolition of concession rights include: Concessions owners may only own three concessions (totalling 15,000 hectares) It forbids mining in protected areas and their buffer zones, as well as if the project threatens water resources (what metallic mining project doesn't?); It abolishes concessions rights if the concessions were given to government functionaries, or their relatives. There's rumors that this could hit the Ecuacorrientes project, among others. It puts a freeze on all mining activities: the only exceptions are the 600 small projects not affected by the Mandate It prohibits the approval of new mining concessions Any concessions owner not up to date on their payment of patents to operate lose their concessions. The Mandate also calls for the creation of a state-owned mining company- which has a lot of mining company owners very worried. The mandate does allows mining to go ahead if the companies have invested in exploration and related activities, but not if it falls under the other categories. In other words, none of the large project will remain viable. These measures are effect until a new mining law is drafted, in about six months time- which must be approved by the same Constitutient Assembly that approved the current Mandate! And not even the president can veto the mandate. By the way, the anti-mining crowd cheered the Mandate, though not too loudly, because some expected the mandate to once-and-for-all call for a large-scale mining ban. The parameters, if applied objectively, will stop all of IMC, IAMGOLD, Aurelian, Dynasty's, All Metals, Corriente Resources (Ecuacorrientes project), and Lowell's - as well as most other metallic mining project in the country, unless they were exploiting at the time of the Mandate's approval. Ascendant Copper lost their JUNIN concessions in January of this year, but this new legal mesures means the loss is permanent (the project poses a great threat to water resources). None of these companies were exploiting minerals- and most- if not all- do not even have their environmental impact studies approved for exploitation or exploration. What happened in Montecristi? The Mandate's overwhelming approval took pro-mining circles here by surprise (to say the least). This was in part because many thought Assembly members would go a bit easier on the Mandate, given President Correa's seeming support for mining. But, inside the Assembly there is a very strong anti large-scale mining faction, led by the very popular ex-Minister of Energy and Mines, Economist Alberto Acosta, who belongs to Correa's Alianza Pais political party. Mr. Acosta has no problem stating his anti-large scale and open pit metallic mining stance. He's an economist and knows very well what mining means to developing countries. This issue, more than any other to date, has caused a deep divide within the Alianza Pais, who won 60% of the Assembly's seats in last year's election. Counter attack..... So, nowadays the companies are applying tremendous pressure-- not to have the Mandate abolished or vetoed (which is impossible), but to soften it as much as possible. They've also enlisted Canada's Ambassador (!) and Ecuador's Chamber of Mining (plus, unfortunately, the press is blindly-and well paid- on their side). The companies and their public relations firms are using scare tactics (thousands laid off, the country will go bankrupt, investors will flee....!!), and threats (we'll hold off on the international lawsuits if only...). And, a lot of money is being spent on trying to convince Ecuadorians that mining will really lift them out of poverty and will solve all of the country's problems- and it won't pollute!! Mr Correa has recently shown signs of weakness by making pro-mining statements and rabidly attacking the opposition to mining every chance he gets- though he has been vague enough to possibly let it be interpreted that he is not against STATE-OWNED mining. The President also means to renegotiate mining deals if private mining is permitted in order for Ecuador to actually make money from mining (a radical idea indeed...!) This would include high royalties (perhaps as high as20%), and a 70-80% Windfall Profit Tax (which has been discussed by Ministry of Energy and Mines official this year). The upshot of all this is that there are many mining company owners that are worried sick- and not just about losing a few hundred million dollars here in Ecuador, but about the potential spread of the Mining Mandate affect to other developing countries. They may not be too worried about whole-scale nationalization of mines (though I would be if I was them), but the steep rise in royalties and windfall profit tax must keep them up at night. Everyone knows that natural resources of these countries have been ripped off left and right by transnationals for centuries, ruining economies, and leaving the people impoverished, and to face long-lasting social and environmental havoc. All Ecuadorians have to do is look over the Andes at the horror left behind by 30 years of petroleum exploitation in the Amazon to know this isn't just talk. So... the rush is on by the transnationals and their in-house plenipotentiary representatives to kill this initiative before it spreads like wildfire. A Mayor from an anti-mining local government has publicly said there are hundreds of millions of dollars earmarked by mining companies to win the hearts and votes of Assembly members. On the other hand, the resistance to large-scale metallic mining has never been stronger in Ecuador. Unlike in the past, the resistance now includes all of the powerful indigenous organizations, who this year joined with all of the human-rights, communities, and environmental groups. And, given that the vote was so overwhelmingly pro-communities and anti- mining last month, there's every chance that no matter how much the companies spend, the Assembleistas are not going to sell their vote to betray they something they so whole-heartily belive in- an Ecuador free of large-scale metallic mining. Carlos Zorrilla
IT'S ALL OVER FOR LARGE-SCALE MINING IN ECUADOR.
Friday, April 18, 2008
IT'S ALL OVER FOR LARGE-SCALE MINING IN ECUADOR (Español ya mismo....) In the last few months, the mining companies spent millions of dollars in publicity to try and convince Ecuadorians that large-scale mining would get them out of poverty, create thousands of new jobs, and bring millions in rents for the government as well as prosperity for everyone. However, today, Ecuador's national Constitutional Assembly passed the Mining Mandate, which will cause the "extinction" of most of the nation's mining concessions. The Mandate was passed by a 95 to 1 margin, with 25 abstentions. The Mandate, composed of 12 articles, sets out the reasons for the extinction- without recourse for recompension- of all the mining concessions where no previous consultation took place with the communities, as of March 31 2007-- Just this measure alone will annul all- or nearly all- the mining concessions given out by the government since the 1998 Constitution, the year this safeguard went into effect. This measure should extinguish about 90% of Ecuador's large-scale metal mining projects- including Canada's Ascendant Copper's, IAMGOLD, AURELIAN, ECUACORRIENTE (CORRIENTE RESOURCES), AVALANCHE, ALL METALS, DYNASTY, LOWELL, and many others. The Mandate sets out other causes for the extinction the concessions- including all mining projects that may impact water resources , and those found within private or public protected areas and their buffer areas (article 3). Those projects that have not kept up their dues with the Ministry of Mines and Petroleum will also lose their concessions, as well as those who have not invested in exploration activities, or in developing their projects. The only metallic mining projects able to continue operation, according to article eight of the Mandate, are those which are currently in the exploitation phase and which have complied with the previous consultation constitutional guarantee. It's worth mentioning that there are no large-scale metal mining projects in the exploitation phase in Ecuador. NEW MINING LEGISLATION Six months from today, was the time given by the Mandate for the government to draw a new mining legislation- which will include a national mining company- something spelled out in the Mandate. LIMITS TO CONCESSIONS: THREE PER COMPANY Concessions numbering more than three per individual or company (including subsidiaries), are likewise extinguished. this limits the number of hectares per company or individual to 15,000 hectares (5000 hectare per concession max). Most companies own dozens of concessions- including Ascendant, Ecuacorrientes, etc. In the case of Ecuacorrientes, until 12 noon today, they owned more than 62,000 hectares within more than a dozen concessions. Now, depending on how the Mandate is interpreted, they own nothing. Ascendant is in a similar boat- if they didn't lose all their concessions for failing to undertake the previous consultation (and we are not aware that the communities were legally consulted anywhere in Ecuador), they will lose all but three of their concessions. Their crown jewels, Golden 1 and Golden 2, the company lost in January of this year as a consequence of legal decision taken by the Ministry of Mines and Petroleum- the Mandate is a far stronger legal measure, which leaves no room for a legal challenge. The nature of the powers vested in the National Constitutional Assembly makes it impossible to legally challenge the body's decisions- and not even Ecuador's president can do anything about it. At least in the case of the mining concessions in the Intag area, not a single mining project has dutifully complied with this constitutional guarantee. This not only includes Ascendant Copper, but also Avalanche, and Lowell Mining, as well as others. At the national level, this will cut down 3,000 or more concessions- mostly belonging to Canadian companies. Many analysts feel the mandate seeks to wipe the slate clean with mining in Ecuador, in order to create much more favorable conditions benefitting the country. The current mining law, modified and paid for by a World Bank project in the 90's, is seen as a particularly harmful for the country's interests. The law exclusively beneffited the mining companies. A big question remains whether the new mining law, which should be ready in 180 days, will permanently prohibit all large and medium scale metal mining in Ecuador. There is widescale support within and without the National Assembly for an Ecuador free of large and medium scale metal mining. After the Mandate, the conditions could hardly be better for it to come about. We in Intag see it as an amzing victory of people power over huge vested interests. As mentioned earlier, the mining companies spent millions of dollars to publicize their pro-mining agenda. Just in the past 48 hours alone, the TV, radio and printed press were indundated with such publicity. There were also wide-spread rumors of hundreds of millions of dollars invested in vote gathering within the Assembly. In the face of this unbelieable onslaught, it is nothing if not amazing that our position won- with the support of some very couragous and ethical members of the Assembly. TONIGHT WE CELEBRATE THIS TRULY AMAZING VICTORY OF RIGHT OVER MIGHT AND BELIEVE THAT IT WILL LEAD TO AN ECUADOR FREE OF LARGE AND MEDIUM SCALE METAL MINING IN THE NEAR FUTURE!
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