Changes to mining laws in Panama are impacting more than just First Quantum Minerals’ (TSX: FM) Cobre Panama operations. Orla Mining (TSX: OLA) this morning revealed it has also been hit hard by modified legislation in the country.
With the passing of Law 407 in Panama, which brought in a moratorium on granting, renewing, or extending mining concessions, Orla has also lost a major project. Panama has rejected requests for the extension of three of Orla’s mining concessions in the country, which consisted of the Cerro Quema Project in the southwest of the country.
READ: First Quantum Moves To Force Arbitration With Panama Over Cobre Panama Mine
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Orla had pushed this project to the pre-feasibility stage, spending over US$120 million in the process to outline an open-pit heap leach gold gold project, along with a copper-gold resource and additional exploration targets. The project had an after-tax NPV (5%) of US$176 million, and a proposed mine life of 6 years.
In rejecting the renewal of the mining concessions, Panama declared the region as a reserve area. Panama’s mining code states concessions cannot be granted on a reserve area.
Orla is said to be exploring legal remedies to protect its investments, including taking measures under international law.
Orla Mining last traded at $4.11 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
