Recently I have received a few e-mails asking me for updated information about the status of gold-mining projects in El Salvador. At this point, gold mines are not operating, but gold mining companies are conducting exploration drilling under permits granted by the Salvadoran government. The most prominent company is the Canadian gold-mining firm, Pacific Rim.
Pacific Rim has provided this update for its investors:
The Company expects to complete its ongoing Balsamo deposit drill program in its second quarter of fiscal 2008, and calculate an updated resource estimate for the El Dorado project by the end of December 2007. Subsequent to the completion of the updated resource estimate, the El Dorado feasibility study will resume (having been temporarily postponed during fiscal 2007 in order to gather the data necessary to include the Balsamo deposit in the mine plan), with an anticipated completion before the end of fiscal 2008. The El Dorado feasibility study will consider the economic impact of including the South Minita and Balsamo deposits in the El Dorado mine plan (as envisioned in the January 2005 prefeasibility study) and the possibility of expanding the annual throughput of the proposed operation. In addition the Company intends to continue exploration drilling within the El Dorado project, concentrating on testing the high priority gold targets it has defined in the southern part of the El Dorado district and will continue its social and environmental initiatives. The Company intends to commence construction of an access / haulage ramp on the El Dorado property once it is able to evaluate the detailed economics outlined in the full feasibility study expected to be completed by the end of fiscal 2008, and will further depend on obtaining the required mining and environmental permits and sufficient financing to proceed. Funds currently available in cash and cash equivalents and temporary investments, plus anticipated cash flow from gold production at the Denton-Rawhide mine and payments related to the sale of the Andacollo mine are marginally sufficient to conduct the Company's planned fiscal 2008 exploration programs but are not sufficient to conduct development activities at El Dorado and additional financing will be required during fiscal 2008 if the opportunity to commence development activities at El Dorado arises. Outside of the El Dorado project, during the coming fiscal year Pacific Rim intends to spend a portion of its available funds on a Phase 1 drill program at the Santa Rita gold project in El Salvador and to conduct early stage exploration initiatives in the lead up to exploration drilling at its other grassroots projects in El Salvador and Chile.
Another company exploring for gold deposits in El Salvador is Intrepid Mines. You can read reports of its exploration status at this link. Intrepid has not advanced as far towards actual mining activities as Pacific Rim.
Both Pacific Rim and Intrepid report that they would be paying 2% royalties, shared between national and local government, if mining operations commence to extract gold.
Civil society groups continue to mobilize in hopes of preventing exploitation permits being granted to the mining companies. For example, NGOs in El Salvador recently sponsored a presentation by Dina Lopez, a Salvadoran and associate professor of geological science at Ohio University, who stated her belief that "green mining" (the phrase that gold mining companies use to describe environmentally friendly mining techniques) is not possible in El Salvador. Lopez explained that given El Salvador's limited geographical size, the precarious state of its water resources, and its population density, gold mining was not worth the cost.