Can you give us an update about the Loma Larga project and the support you are receiving from the government?
The Loma Larga gold-copper-silver project is our flagship asset. Loma Larga will be an environmentally responsible underground mine with an initial 12-year life. It will produce over 200,000 of gold equivalent ounces per year and employ almost 500 employees when in production. In 2020, our plan is to obtain environmental permits, perform community consultation, and secure project financing, with the goal of commencing construction in 2021. INV Metals and our team has received significant support from the government. We appreciate the strong support we have received from the minister of energy and non-renewable resources and the vice minister of mines. The mining industry has the potential to become a pillar of economic development and growth. A responsible mining sector will provide safe employment opportunities, a stable tax revenue base, and a source of GDP growth.
What are your strategies to navigate the demands of local populations and the different regulatory authorities?
INV Metals maintains an open and transparent partnership with local communities in its area of influence. We have been working with local communities for 15 years, supporting programs that focus on training, animal husbandry, micro enterprises, and environmental stewardship. In 2020, our team will focus on the permitting phase and will liaise with the relevant governmental ministries as we progress. Consultation and communication with the local communities will be based on accurate and scientific information. Our focus on environmental excellence and our dedication to stewardship will be highlighted during this phase. The mine will have minimal surface disturbance as it is underground and accessed through a ramp. Our tailings facilities will utilize a filtered tailings method, which will be covered and revegetated upon closure. Notably, the project is not located near rivers or lakes, and we will try to divert as much surface water as possible. Water collected from the mine will be used in the process facility and recycled, while all the water that comes into contact with the mine site or process facilities will be treated in line with international standards. We will set an example of how the mining sector should partner with local communities.
What impact do you expect the mine to have on the local economy?
There are many benefits that stem from the development of mining projects, and we expect Loma Larga to generate significant development and employment opportunities for the local community. Loma Larga will employ approximately 875 people during the construction stage and almost 500 employees during the production phase. Training programs focused on the skills required for mining and safety will be offered to local communities. Given that the price of gold is USD1,250 per ounce, the mine will generate USD177 million in corporate income tax, USD107 million in state profit-sharing taxes, USD108 million in royalties, and USD27 million in employee profit-sharing taxes. There is also potential for more increases in case there is a rise in the price of gold.
How attractive is Ecuador compared to other neighboring countries?
Ecuador has significant untapped exploration potential. Due to improved mining laws, many international mining and exploration companies are interested in doing business in Ecuador. Two large-scale mines began production in 2019, and our goal is to make sure Loma Larga the next large-scale gold mine to enter into production. In order to attract investment, the country needs to maintain stable laws and regulations and have a comparable tax regime. We believe Ecuador will emerge as one of the leading mining countries.
What are your goals for 2020?
In 2020, our primary goal is to acquire environmental permits. In addition, we will execute communications strategies to support our community consultation process and focus on obtaining project financing. We will also continue working on our four greenfield exploration properties. Our goal is to be one of the leading socially responsible gold producers.