Exposing Ascendant Copper Corporation’s Latest Spin
If there is one thing that makes most mining companies homogenous, is their need to spin, distort, and disinform the public regarding either the real value of their mining deposit, the regulatory obstacles they face, and/or, the projects’s environmental and social challenges, plus the true nature of the opposition their projects face on the ground. They are specially careful about controlling and manipulating the information regarding grass-roots opposition. Rarely are all these spins found in one single, short news release. Following is a typical example of such spin- one of many we’ve faced in the years of dealing with a copper-mining project in the biodiverse Toisan Range of Ecuador.
The October 10th Resource Investor news release (http://resourcexinvestor.com/news.php?id=2554) concerning Ascendant Cooper Corporation projects in Ecuador makes quite a lot of interesting, and outright disingenuous claims.
Let’s look at the claims in the news release one by one.
Amount of copper: We are sitting on the second if not the largest copper/molybdenum property in the world” …… “in fact we are looking at a potential in excess of a billion pounds of molybdenum and in excess of 20 billion pounds of copper”.
Truth: The truth is that, after 5 years of exploratory drilling in the 1990’s in the Junin mining concessions, the Mitsubishi subsidiary, Bishimetals, only inferred the possible existence of 2.26 millions tons of copper, and very little molybdenum . This amounts to four times less copper than what Ascendant is saying they are “sitting on”, and only 52 days worth of global annual consumption. Needless to say, it does not constitute even a medium size discovery, much less a world-class one. On the other hand, what little was discovered in the company’s Chaucha concession was so disappointing, that it led Antofagasta to pull out of their joint exploratory agreement 2 months ago forcing Ascendant to fork over to the Chilean mining company 1.12 million dollars (http://biz.yahoo.com/iw/070716/0278284.html)
Suspensions: the release makes this assertion concerning the Ministry of Mines and Petroleum latest stop work order:
“On the downside, the Correa government on September 25 announced the formal suspension of Ascendants mining and community development activities in the Junin area in an effort to defuse tensions, an announcement Ascendant said was only a repetition of a previously announced order”
The Truth: the September 25, 2007 complete work suspension, contrary to what Ascendant would like to believe, is very much different from the other three suspensions, in that it came with a legal order signed by Ministry officials, and was based on a major judicial decision by the nation’s Attorney General. Also unlike previous times, this suspension was based on a violation of article 11 of the Mining Law- something not used in the previous suspensions.
The Confrontation: This is what the Resource Investor has to say about the decisive and violent confrontation between the communities resisting the project and paramilitary-like security guards paid for by Ascendant:
“These tensions boiled over in December of last year on Ascendants agricultural property. Anti-mining activists confronted a third party contracted agricultural firms Intag workers and security guards resulting in almost 60 people being held captive by activists, and locked in the local community church for several days until order was restored by Ecuadorian police.”
The Truth: The confrontation took place, not on Ascendant’s agricultural property, but on the road leading to the community of Junin. Second, the “agricultural firm” mentioned was hired by Ascendant, and the persons which confronted and shot at the unarmed community members were a paramilitary force, as described by CEDHU, the prestigious Quito-based human rights organization. Third, of the nearly 60 persons held in the community church, none was from the Intag or Junin area- all were ex-military personnel from the coast of Ecuador, all had .38 caliber hand guns, pepper spray, and several had 12 gauge shotguns. The company later tried to claim these individuals were “agricultural consultants”.
The Copper Delusion: As if this self-delusion wasn’t enough, the news release goes on to say that: “The Junin prospect has an inferred, NI 43-101 compliant resource estimate of 982 million tonnes. A drilling program is under way at the Chaucha property on the western flank of the Andes, the results of which are expected to up its combined resource estimate, according to Haigh”.
In June of this year Micon International stated that, because of a noted discrepancy between a 2007 and an original assaying of the Bishimetals sampling, it was unable to verify their previous inferred 982 million ton copper deposit. Here is an excerpt from the June 11th release
Because of the noted discrepancies, Micon has advised Ascendant that the inferred resource estimate contained in the Junin Report of 982 million tonnes grading 0.89% copper, 0.04% molybdenum and 1.9 grams per tonne silver, may not be fully representative of the mineralization at Junin, as the inferred resource estimate was based on historical data, some of which is now considered to be unverifiable due to deterioration of the core samples over time, the loss of fine material in the transfer of the historical core samples, and the methods of sampling and assaying employed during the 1990s Program. .” http://biz.yahoo.com/iw/070611/0264465.html
In other words, termite damage and other factors may now make it impossible to confirm Micon’s earlier inferred results for the Junin mining concessions. In fact, in 2006, C
ELA, the Canadian Environmental Law Association, filed a complaint with the British Columbia Securities Commission questioning the procedure used by Micon International to ascertain the Junin inferred mineral content, which was based on the Bishimetals samples. The complaint is still being investigated.
Scapegoating: If there has been a constant among Ascendant’s spins it is its efforts to try to portray to the world that their problems in Junin are due exclusively to the work of an environmental organization in the area. Here’s what the October 10th news release has to say:
“The problems that we have had and are having at Junin are the result of a massive campaign of no mining in Ecuador conducted by a local NGO. This particular NGO has been operating since the mid-1990s and were violent objectors to Mitsubishi when they were drilling there from 1993 to 1997 on the same deposit.”
DECOIN is very flattered to think that we, a very small, under funded and understaffed grass-roots organization, with an office measuring 3 by 3 meters in the Intag town of Apuela (rent: $ 40 a month), could be responsible for all of Ascendant’s troubles in Junin. But we know the truth is very different, and that Ascendant’s allegations have other objectives. It is in any corporation’s interest to create the illusion that their project does not face grass-roots community and local government opposition. As every Banker knows, this is equivalent to a death sentence for mining projects.
The opposition to Ascendant’s Junin project is, in fact, truly remarkable in scope- perhaps even unique. It includes all seven local township government in Intag, as well as the Canton (county) government of Cotacachi, and the Provincial government of Imbabura- not to mention approximately 95% of the area’s legitimate organizations, and the overwhelming majority of the communities. Finally, it is important to point out that the opposition to the company’s project is led by the communities, and by them alone. The opposition to mining, far from being concentrated in Intag and Junin, is now a national issue, with several very strong anti-mining national groups opposing large-scale mining development. Given the firm and widespread opposition generated by this single mining project, one can only hope that investors are asking themselves what was it that the company did to deserve it. And while they are at it, perhaps they can question the need to misinform, exaggerate, distort, and keep vital information from the public.
As a matter of fact, these are the kinds of question Rio Tinto Zinc should be asking itself, since it apparently considers itself a socially responsible corporate citizen, and Ascendant considers Rio Tinto its “strategic partner”.
DECOIN
