Issue link: http://resourceworld.uberflip.com/i/759903
D E C E M B E R / J A N U A R Y 2 0 1 7 www.resourceworld.com 27 try competitive with its Latin American neighbours. A Ministry of Mines was formed with a mandate to develop the mining industry. The government established three cate- gories of mining operations: small, medium and large with incentives for foreign invest- ment in the small mining category. There is also a phasing in of refundable VAT on Capex and Opex costs that add up to 2% of a project's IRR as well as an accelerated depreciation of five to ten years. "We are now seeing now the results of all that effort with projects finally moving forward. One of our best examples to show is Lundin Gold's Fruta del Norte Project where we are about to sign an exploitation [mining] contract shortly. Development will soon start on one of the most impor- tant under developed projects in the world," said Cordova. "We have also had a very good response with more than 300 applications for new concessions from companies in Canada, Australia and Chile which is encouraging for the long-term goal of seeing the min- ing industry growing stronger and playing an important role in the Ecuadorian econ- omy," Cordova noted. He explained that in the last few years it was mostly juniors attracted to Ecuador but some senior companies have now arrived. "For example, Australia-based Newcrest Mining just bought 10% of the Cascabel copper project from SolGold," he said. Also, Australia's Fortescue Minerals are already requesting about 200,000 hect- ares of new concessions and we`ve been talking with BHP Billiton and Newmont." Mining companies (and investors) like certainty and Cordova said that mineral explorers are pleased with Ecuador's min- ing regulations and the security of their mineral concessions. "We have offered all the security they need. We understood that we needed to make some changes in order to make the Ecuadorian conditions attrac- tive," said Cordova. Most of the interest has been in gold, silver and copper projects. As far as exploration services are con- cerned, Cordova said that there are some Ecuadorian diamond drilling and camp companies; however, there are Chilean, Peruvian and even Australian service com- panies that are looking into setting up in Ecuador. Infrastructure, of course, is of great interest to explorers and the Ecuadorian government has invested in hydro power which generates some of the lowest cost power in Latin America. "The government has also spent about $6 billion building some 900 hydroelectric plants that will not only provide all the electricity that the mining industry needs, but also it will allow us to maintain a low cost of electricity," said Cordova. "If you compare the cost of electricity in Ecuador with the cost of electricity in the world, we are about half the cost in other countries. Not only are we providing enough energy LeFt: a diamond drill tests a prospective target at Lumina Gold's Cangrejos gold- copper project in el oro province, southwest ecuador. photo courtesy Lumina Gold Corp.