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Gold mining is delayed due to slowness of Panamanian Government Approval

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Gold mining is delayed due to slowness of Panamanian Government Approval

Fri, 04/13/2018 - 15:30

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Gold extraction from the Cerro Quema mine in Panama will be delayed nearly a year and a half, in which more than 100 million dollars has already been invested, due to the lack of approval of the Environmental Impact Study (EIA) and the extension of a concession by the Panamanian government.

The general manager of the company Minera Cerro Quema, Octavio Choy, told EFE, by expressing his concern about the dilatation in the approval by the EIA "presented about three years ago", although he expressed his hope that before the end of 2018 he will receive the governmental approval.

Choy, also legal representative of the mining company, subsidiary of the Canadian Orla Mining Ltd, explained that they are also waiting for the Ministry of Commerce and Industries (MICI) to issue the extension of the concession contract, in order to invest another "120 million dollars" in the phase of civil works, "which would take a year and a half", and generate about 500 direct jobs in construction and between 150 and 200 in the operation.

"Indirectly" this phase "can reach (generate) 1,000 jobs," he calculated.

The mining project Cerro Quema began the exploration activity in 1995, according to data from the Mining Chamber.

The firm dismissed 25 workers three weeks ago, leaving 105 workers in the base camp of the concession, located about 300 kilometers southwest of the Panamanian capital, located in a 900-meter high massif on the Azuero península, of intense agricultural activity.

"Our perspective is that we will have to wait until the next year, because the government has not told us anything negative or positive," he said.

The seven years in which he has been the manager, the mining company has invested "more than 100 million dollars in exploration, drilling, social, environmental programs, to protect the rivers from the sediments, because we know that it is a very sensitive factor," said Choy.

Only in hot food, for five years the company distributes more than 500 daily rations for children at the schools of their environment, to which we must add those of the employees and third beneficiaries.

Eight years of exploitation of the mine, plus three years of mitigation of the environmental impact before the closure, is the work plan that Choy has in view to reverse the intervention, and prevent erosion and the fall of sediments by the rain "if we leave a bare hill".

The price of gold "in the last four years" has been low, but "it has already begun to recover again, and we see that the price in the next two to three years will start to rise more than it was seven years ago, and even now, with the price of 1,300 dollars (the troy ounce), it's good, because our cost price, not to mention financing, is about 500 to 600 dollars," he said.

"We see the project quite robust in that sense," said Panamanian Choy.

According to the mining law of Panama, he said, the Panamanian state will receive 4 percent in production royalty during the eight years of exploitation, "apart from taxes."

"The división of this royalist money is a decision of the Central Government. We want a transparent management because we have seen bad management in others and we do not want that to happen, because it affects the company," he said.

Choy said that "it is not correct", as the environmentalists who oppose the project say, that the mine will affect aquifers or rivers close to the 15,000 hectares of the concession, and that there is no risk of "acid rain" because there will be sulfides exposed to the environment.

However, he added, water pumps are being built to "clean" the liquid before discharging it into the environment.

Choy said he was "pleased" by the support of the Panamanian Mining Chamber, which today will meet in his camp, and acknowledged that "Canadian investors are very patient" because they see that the firm has complied with the contract and see no reason why Panama cannot extend the concession. ACAN-EFE

By Luis Miguel Blanco/EFE



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