Adventus, Salazar granted key permit for Ecuador copper-gold mine

Adventus Mining (TSX-V: ADZN) and Salazar Resources (TSX-V: SRL) have scored a win in Ecuador after the country’s environment ministry granted the partners a water use permit for their Curipamba-El Domo copper-gold project.

The authorization means the two companies can carry out planned construction activities once they receive a final document outlining the transition from the medium-scale exploration activities to an exploitation phase.

Adventus and Salazar warned construction, expected to begin this month, may be further delayed as a result of a lawsuit filed by a group of locals requesting their environmental permit for the $293 million Curipamba-El Domo mine be revoked.

The injunction, accepted last week in the Las Naves canton in Bolívar province, alleges non-compliance with Ecuador’s environmental consultation process. Adventus and Salazar say they have “ample well-documented evidence” showing the opposite.

Popular referendums are a necessary step for any company to obtain a mining license in Ecuador. Without them, firms would have to wait longer than expected to have all permits in place before starting construction of a mine.

“Based on an initial review of the legal action, [we] are confident that Ecuador environmental ministry has strong evidence to refute the allegations presented,” the companies said in a statement.

Adventus and Salazar Resources estimate a decision on the case by the local judge could take between two and three months. A potential appeal may follow, which could take an additional three to six months. Depending on the ruling, the case could end up in the country’s Constitutional Court, they said. 

The Canadian companies noted the environmental license remains in effect unless the latest legal action succeeds.

A feasibility study for Curipamba-El Domo, published in late 2021, envisioned a 10-year operation with average annual production of 10,463 tonnes of copper, or 21,390 tonnes of copper-equivalent. This outlook is based on proven and probable mineral reserves of 6.5 million tonnes at 1.93% copper, 2.52 g/t gold, 2.49% zinc, 45.7 g/t silver and 0.25% lead.

Once built, Curipamba-El Domo would be the third operating mine considered key by Ecuador’s government. To date, the country’s only two producing assets are the Mirador copper mine, run by China-backed Ecuacorriente and Lundin Gold’s (TSX: LUG) Fruta del Norte gold mine.

Silvercorp takeover

Adventus Mining noted the acquisition of the company by Silvercorp Metals (TSX: SVM) (NYSE: SVM), announced in April, continues to evolve as planned.

A final shareholder vote is scheduled for June 26 and the transaction should close by July 5, subject to investors’ approval.

Silvercorp’s existing cash balance of $200 million, combined with a $175.5 million streaming deal inked between Adventus and Wheaton Precious Metals in 2022, are expected to fully fund Curipamba-El Domo through construction.