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Dundee Precious Metals (TSX: DPM) announced on Tuesday that the Provincial Court of Azuay in Ecuador has delivered a decision that, upon preliminary analysis, would reaffirm the company’s mining concessions for the Loma Larga project.
Loma Larga is an underground gold-copper-silver project located approximately 30 km southwest of the city of Cuena. A feasibility study indicated that Loma Larga has the potential to produce an annual average of approximately 170,000 oz. of gold during an estimated 12-year life.
The decision pertains to an appeal of the Constitutional Protective Action filed against the Ministry of Environment, Water and Ecological Transition (MAATE), which is responsible for the issuance of environmental permits.
It follows an oral decision delivered by the Judicial Labour Unit of Cuenca in July 2022 that upheld the validity of Dundee’s environmental permits, and confirmed that the MAATE did not violate certain rights relating to the protection of water and nature in granting the permits.
The provincial court’s decision also clarified that free, prior and informed consultation of certain local indigenous populations must be carried out by the state, which the company said it had already planned as part of its project development.
Environmental consultation with communities in the project’s area of influence would also need to be provided by the MAATE to the court prior to advancing the project to the exploitation phase.
“As we assess the court’s decision, we remain committed to the highest applicable standards for environmental protection and stakeholder engagement in-line with International Finance Corporation standards,” Dundee CEO David Rae said in a statement.
He added that the company will be engaging with the government to outline the next steps for the consultation activities and, based on the extensive environmental work completed to date, will work with the ministry to provide any additional details as quickly as possible.
For years, the Loma Larga project has faced strong opposition from local indigenous groups and communities, dating back to the days of exploration carried by previous owner INV Metals.
In February 2021, the residents of Cuenca voted to defend their water and wetlands from mining activities. Despite this, Dundee proceeded with its acquisition of INV Metals that year, as it considers that the referendum would not impact already-established projects.
Shares of Dundee Precious Metals rose 0.8% by 12:40 p.m. EDT Tuesday following the latest court decision. The company has a market capitalization of C$1.7 billion ($1.2bn).
