World Today News, 20/07/2021
Gold miners operating in Nicaragua are advancing with growth projects amid the anticipated production boom and consider that the country offers a safe haven for the industry in the face of increased resource nationalism observed globally.
Junior miners and producers are achieving milestones on a series of projects that could bring in more than 300,000oz in annual gold volume, roughly double current production.
The investment is based on a positive relationship between the government and industry players, who consider that the Central American nation offers a good environment for mining.
“[En Nicaragua] we have a strong, transparent, mining-friendly jurisdiction, ”said Darren Hall, CEO of Canada’s Caliber Mining, whose Nicaraguan assets include the Limón and Libertad operations.
“It has a history that generates pride. Understand the value that mining can bring. Gold is its main export. “
Other companies operating in the country also agree.
In June presentations, Mako Mining, with its San Albino mine, and Condor Gold, which is advancing the La India gold project, praised the prominent administration as a positive factor for doing business in Nicaragua.
Skilled workforce and good infrastructure were also advantages that companies mentioned, in addition to their relative safety.
“I have spent a lot of time in the country and I have never felt threatened or have been offered a bribe,” Hall told BNamericas.
The tax regime is also considered relatively benign, as miners pay a 30% corporate tax and a 3% net smelter return royalty, according to Condor.
PROJECT MILESTONES
Several expansion projects in Nicaragua have reached critical development milestones in recent months.
Mako Mining announced commercial operations in San Albino in July, while Caliber is increasing production at the Pavón Norte deposit, from where it transports ore for processing at the Libertad property.
Caliber is also advancing exploration activities at its Eastern Borosi project, which is also a short distance from Libertad.
Condor, for its part, continues to prepare a feasibility study for a processing plant in India associated with a recently acquired mill. The study will be completed in the next few months.
The company estimates initial production of 80,000-100,000oz / y in India, before expanding operations.
THE POLITICAL FACTOR
The political landscape could be about to change.
Nicaraguans will go to the polls in the general elections on November 7. Leftist president Daniel Ortega, of the Sandista National Liberation Front (FSLN), leads the polls.
Following a third consecutive electoral victory in 2016, Ortega’s last term has been marred by violent anti-government protests that began in 2018 and were repressed by the authorities.
More recently, international agencies have expressed concern over Ortega’s authoritarian stance and the recent arrests of several opposition leaders.
For mining companies, the surveys could mean temporary disruptions.
“The next elections will be tough,” Hall said.
“The government will be on the lookout for other things during the electoral process, so things may not move as fast as they normally would.”
However, the overall outlook remains positive, whoever wins.
Ortega has indicated that he is not in favor of the resource nationalism approach that is discussed and promoted in many Latin American countries, such as Chile, Peru, Mexico and Argentina.
“I have met with President Ortega on several occasions and he has made it very clear to me that they tried the path of nationalization of the mines in the 1970s and it did not work,” Hall said. “They don’t have the capacity or the experience to do it.”
Meanwhile, the main opposition party is “openly pro-business,” he said. “I am not particularly concerned in that regard.”
PERCEPTION PROBLEM
Hall’s main concern is external perceptions of Nicaragua as a mining jurisdiction, as some investors and companies remain unconvinced of the country’s credentials.
Nicaragua ranked 67th out of 76 jurisdictions globally in the investment attractiveness index of the Fraser Institute’s 2019 annual survey of mining companies.
The country was not included in the latest 2020 survey due to insufficient responses.
“The external perception of Nicaragua and the ignorance of its solid mining legislation is not a problem, but an opportunity for us,” says Hall.
“The better we can spread the message that Nicaragua is a good place to operate, the better it will be for us.”
