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Reinventing regional mining

Monday, August 3, 2015

The formula for successful mining in the region may involve a resource company big enough to offer economies of scale, and flexible enough to be able to manage small projects.

The collapse this year of the Petaquilla gold mine in Panama may be due in part to falling commodity prices.

At $1,090 an ounce, the price of gold is down nearly 50% from its peak in mid 2011.

The suspension of the Molejón project in Colón Province may also be due to the limited resources of the project manager, Petaquilla Minerals Ltd., which has no other mining operations.

The Toronto Stock Exchange last February ordered a delisting of the shares of Petaquilla Minerals, based in Vancouver, Canada, while the Panamanian mine, originally awarded in 1997, has not been fully operational since 2013.

To succeed in Central America, which has deposits of gold, silver, copper and nickel, a mine would need to counteract opposition from environmental groups by offering adequate compensation – including royalties from operations and a guaranteed restoration plan - while limiting the scope of mining operations.

Industrial mining is currently prohibited in Costa Rica and El Salvador.