ECUADOR - Energy & Mining
Dominic M. Channer has a degree in Geology from the University of Oxford, a Master of Arts degree from the same institution, and a PhD in Philosophy from the University of Toronto. He began his professional career as an Exploration Geologist at Guaniamo Mining Company, and also went on to be Chief Geologist and Vice-President at the same company. In 2007 he was appointed President of Aurelian Ecuador, and became Vice-President of External Affairs & Corporate Responsibility at Kinross Aurelian in 2009. Channer is currently President of Aurelian Ecuador and Vice-President of Kinross Ecuador.
Fruta del Norte is a mineral deposit that has fantastic potential for Ecuador. It is expected to be the first major large-scale underground gold mine in the country’s history. In order to actually put the mine into production, we have to go through a number of steps, including signing a contract with the government of Ecuador. Apart from that, there are a lot of technical studies, environmental studies, and permits of a wide range in nature that we need to obtain to move the project into the production stage.
We have been here almost 10 years. Mining has the curious characteristic of taking a very long time from when you start exploring to putting it into production. Since 2003, we have explored a large area in the southeast of Ecuador, and in 2006 we found a gold and silver deposit—Fruta del Norte. The deposit is about 200 meters below ground and it is a very high-grade deposit. In a mine, the grade is rated on how many grams of gold you have in every ton of rock. There are many mines around the world now, such as in Chile and the US, for example. Usually those mines have a grade of about 1 gram for every ton of rock. Fruta del Norte has an average grade of approximately 8 grams per ton, which is very high. That is one of the reasons why this deposit is so important. Right now, we have reserves in Fruta del Norte defined at almost 7 million ounces of gold and almost the same amount in silver.
Kinross has mines in many parts of the world. We have mines in South America, North America, Central Asia, and Africa. Right now, South America represents about 36% of our global gold production from our mines in Brazil and Chile. We produce around 900,000 ounces of gold every year in South America, making it a very important region for us on a global basis. When you add in the potential production from our project in Ecuador, that makes South America even more important for us. Fruta del Norte is a mine that could be producing for 20 years or more. When you see that kind of long-term production of a very high-quality ore deposit, it means Ecuador is important for Kinross.
We have worked with the local communities for a long time. The fundamental objective is to always base a relationship on trust and transparency. As part of the relationship, we have developed a very clear, long-term community investment strategy. It is the people of the parish, not us, that say how they want to develop their community over the next five to 10 years. Right now, the region that hosts us in Ecuador is one of the poorest in the country, making our development priorities revolve around good planning execution: building better schools, clean water supplies, stable electricity, and better roads. There is a lot of basic infrastructure that cities take for granted, which villagers lack. We help them develop the project and then the plans are implemented. We wanted to avoid the old paternalistic model. We are part of the community and need to contribute responsibly to long-term development, but it is their plan, not ours. It is a very constructive way to have the relationship. We have completed many projects on a participatory basis, as letting the community take the lead fosters ownership and accountability. We have had many fantastic experiences, and we have some excellent infrastructure and education projects on the go. For example, an important part of our commitment is to favor local employment.
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