Ecuadorian gold and copper resource touted as major find

Mining industry veteran Malcolm Norris says he has struck upon a gold-copper resource in northern Ecuador that may make the world’s resources giants sit up and take notice. 

Norris has seen a surge in interest from institutional investors in the El Palmar project since his exploration company Sunstone Metals disclosed a significant discovery to the Australian Stock Exchange on October 7. That is reflected in the share price, which has risen almost threefold from its closing level on October 6. 

“The opportunity to deliver a large discovery is there — it just requires more drilling from us,” Norris said from the company’s base in Brisbane. “I would expect that if we make the discovery that we think we’ve got, it will be of interest to quite a few of the majors.”

Global miners are on the hunt to meet surging demand for metals such as copper and nickel, which are expected to drive the world’s transition to clean energy. In a sign of the importance of locking in resources, BHP Group is in talks about buying into a copper project in the Democratic Republic of the Congo, marking a dramatic departure from the world’s biggest mining company’s policy of shunning risky jurisdictions.

Sunstone’s find is located close to the Cascabel copper-gold prospect being developed by SolGold, which includes BHP and gold major Newcrest Mining among its major stakeholders. Norris was MD of SolGold when it made the Cascabel discovery and his confidence in El Palmar stems from it being part of the same geological belt. 

Norris will be aware of the risks in operating in developing nations. He led a team at Intrepid Mines which unearthed the giant Tujuh Bukit copper-gold deposit in Indonesia, only to see Intrepid lose control of its 80% stake in the project in 2012 to a local company.

Still, Norris sought to dispel any perception of Ecuador as politically unstable, saying such a view was outdated. President Guillermo Lasso, who came to power in May, is a former banker who supports mining.

“Ecuador needs to grow its economy and he can see that the mining industry can significantly improve GDP,” Norris said. 

Mining operations can face strong local opposition in the South American nation and Sunstone is looking to avoid that by providing jobs and supply contracts to people and businesses near the project, located 60km north of the capital, Quito. 

The government has said it wants four new metals mines, including Cascabel, to begin production by 2025. El Palmar will take a little longer, but Norris said further drilling would give a clearer picture on the scale of the resource by mid-2022. Meanwhile, if Sunstone can prove that the project holds commercial quantities of both gold and copper, it can increase the attraction to would-be developers, he added.

Bloomberg News. More stories like this are available on bloomberg.com