COPPER MESA SELLING ITS FLOTSAM
Apparently Nortec Ventures decided not to buy Copper Mesa’s Ecuadorian flotsam. But the company’s debris is still for sale.
Just what is up for grabs?
In spite of what Copper Mesa claims in page one of the latest Management’s Discussion and Analysis for the three months ending March 31, 2009, the company no longer has concessions in the Intag area. It lost its most “valuable” concessions- including the Junín mining concession, and Chaucha. The Junin concessions Copper Mesa permanently lost in November 2008 and January 2009. These concessions are in the hands of the government and, according to the new mining law, can only be exploited by a national mining company.
The company list as one of its most important assets the properties in the Junin area. However, Copper Mesa does not have nearly as many legal land titles in the Junin mining site as they claim, ever since the government took away 17 of them away after discovering illegal procedures in their transactions (an additional 15 properties are being looked at for irregularities).
They are certainly not buying a viable company. Copper Mesa’s stocks have lost more than 98% of their value in the last few years (and the slide continues). They are also quite a bit in debt- to the tune of more than three million dollars, and in debt with a community development organization, renters and employees.
The Junin mining site, to list just some of the insurmountable obstacles faced by any mining company idiotic enough to want to resume this project,:
1) Is located in primary cloud forests harboring dozens of endangered species of mammals and birds (including Jaguars, Brown-faced Spider Monkeys, and Spectacled Bears)
2) Has several pre-Incan archeological sites within its boundaries
3) Its “inferred” mineral deposit is several times larger than what was inferred by Bishimetals in the 1990’s after year of exploration.
4) Has aroused unparalleled local government and community opposition
5) Sits wholly within a newly created Municipal 18,000 hectare protected area
6) Since the passing of the new mining law, the concession can only be exploited by the national government.
(For a complete list of obstacles, see the blog, Nineteen Reasons Why Nortec Should Stay out of Intag
Whoever buys this outfits, also buys a company that has experienced very grave problems with communities and government officials, and has lost around 30 million dollars without anything to show. Certainly the company never drilled within the infamous Junin mining concessions.
What is up for grabs is a legacy of irresponsible administration (not to say lunatic), human rights abuses, violent conflicts, plus a major lawsuit in Canadian courts against the company and the Toronto Stock Exchange. It’s a business bogged down by a huge debt, ridiculously high office rent, astonishingly high wages (especially considering the lack of results), no real assets on the ground, and very negative perception by all involved in this business in Ecuador.
Chaucha and Telimbela. Is Chaucha a real asset? Even if it were, it is very likely no longer in the company’s hands. This mining concession was not picked up by any mining companies for about 10 years after a Mitsubishi Subsidiary finished exploring the site. If it was worth anything, someone would have snapped it up long before Copper Mesa. Antofagasta, a Chilean mining company, pulled out of a partnership with Copper Mesa to develop this site after seeing the poor results of a few months of exploration.
Telimbela is an interesting case in what could be seen as insider trading. The Telimbela concession legally belongs to Ecuagold, which at the time of the exploration deal, was headed by one of Copper Mesa’s ex directors.
In short, the company is selling a business that has, not only no future, but no mining concessions in its name of any worth in Ecuador- with zero chance of ever getting the concessions back- an unsavory local reputation, and the rejection of the local communities where it has worked, plus a multi-million dollar lawsuit against it in Canadian courts.
What a deal!