Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Orla Mining (TSX: OLA)(NYSE: ORLA) said Monday that the Panamanian government had rejected the company’s request for permit extensions at three mining concessions that made up its Cerro Quema gold project.
The Vancouver-based miner said the government went as far as to declare the area comprising the concessions to be a reserve area, cancelling them altogether.
Orla, which also has assets in Mexico and in the US state of Nevada, said it would continue to monitor developments in Panama.
It also noted the situation in the Central American country, which recently forced First Quantum (TSX: FM) to shut down its giant Cobre Panama copper mine, remained uncertain and evolving quickly.
Orla added it has decided to not consider any further spending toward developing the Cerro Quema project.
“The company will explore all legal remedies available to protect historical investments and potentially unlock additional value for its stakeholders, including taking measures to protect its rights under international law,” Orla said in the statement.
Cerro Quema’s development considers open pit mining of 21.7 million tonnes of ore from the La Pava and Quema-Quemita pits. The operation, planned to be built in multiple phases, is estimated to be able to produce 81,000 ounces of gold over an estimated six-year mine life.
During the construction stage, Orla estimates that it would generate 3,600 direct and indirect jobs and 1,200 during operations.
Pressed by massive protests against mining in Panama, the government of Laurentino Cortizo passed a bill on Nov. 2 banning all new mining concessions and permit extensions in the country.
Other companies active in Panama include Franco-Nevada (TSX, NYSE: FNV), Antler Gold (TSX-V: ANTL) and A.I.S. Resources (TSX-V: AIS).
It remains unclear how the ongoing developments will affect their projects and operations.
