Another Bad Deal in the Works
In the midst of Copper Mesa and Nortec Venture’s deal, and not mentioned in the company’s latest creative reports, is the implication of the Ecuadorian government’s intention of taking over as many old mining concessions- including Copper Mesa’s ex JUNIN concessions, which the company lost in November of 2008
As recent as May 24 of this year, the government publicly said that it intends to nationalize the mining sector (http://www.reuters.com/article/businessNews/idUSTRE54N03020090524?feedType=RSS&feedName=businessNews.
Article 24 of the recently approved mining law calls for the government to take back all mining concessions in which in the past it invested in exploration and geological investigation. The application of this article will directly affect all three of the company’s ex-concessions in Intag: Golden 1, Golden 2 and Magdalena 1, plus Chaucha (in the south) since the Ecuadorian government, through its national mining company, Codigem, directly took part in, and helped fund exploration activities in all of these ex-concessions during the 1990’s.
This is a material as it gets, and it was not reported in the company’s latest year end 2008, and first quarter 2009 reports. But this is a little bit like saying the company will lose something they don’t even own, since the company lost all of its concessions in the JUNIN area starting November 2008. Yet in parts of the its latest financial and analysis reports, it claims to own them….*see below)
(Taken from p. 1 of Management and Discussion Analysis)
Overview
During the year ended December 31, 2008, the Company acquired all of the common shares of Redstone Mining Corporation (formerly St. Geneviève Resources Ltd.) (“RMC”) and its United States’ properties – the historical past-producing Zonia and Emerald Isle copper mines as well as an exploration prospect in Arizona and other exploration projects in Nevada, thus broadening the Company’s horizons by diversification in the Americas.
In Ecuador, the Company holds a 100% interest in both the Chaucha(1) copper molybdenum porphyry property and the Junin(1) copper-molybdenum, gold-silver porphyry property;
Interestingly enough, later on the report the company says it hasn’t received confirmation it owns the concessions since 2007
(The Company has been unable to receive confirmation of title to its Junín concessions for the year ended December 31, 2008 and 2007.”- p. 11 of the Management’s Discussion and Analysis For the Year Ended December 31, 2008)
The company also claims that it lost its concessions in Junin because it didn’t have an EIS-, implying that by fulfilling this criterion it may reclaim its concessions. This is a lie. The company lost its Golden 1 and Golden 2 concessions due to the application of the Mining Mandate, which reverted back to the state all concessions that at that time did not comply with a number of criteria, only one of which was not having an EIS. In the case of Copper Mesa, the main reason the company lost its Golden 1 and Golden 2 concessions was because the company never properly consulted with the communities- a Constitutional issue. In any case, Article 24 of the mining law makes this a moot issue, since it forces the government, through the National Mining company, to assume ownership of these and other mining concessions.
Keep tuned for a detailed anaylisis of Copper Mesa’s recent financial and Management Discussion and Analysis reports- including the company’s doubtful reporting regarding the real amount of metals at the company’s ex JUNIN mining concessions.
See the previous blog for another 19 reasons why this is a REALLY BAD DEAL!
Carlos Zorrilla
Comments are closed.