Orea Mining Corp. (TSX: OREA) (OTCQB: OREAF) (FSE: 3CG) will put off buying a 5 million ounce project in French Guiana owned by the Russian miner Nord Gold PLC (FRA: RTSD) until all sanctions are lifted.
The company said on Monday that under the agreement, Orea is set to pay $100 million but it will only go through if relevant jurisdictions sanctions are lifted. This includes jurisdictions in Canada, United Stated, France, United Kingdom and the European Union.
However, if the sanctions are still in effect within three years after Orea receives all the necessary permits to operate a gold mine at Montagne d’Or, or within seven years after the acquisition’s closing, then the payment won’t be required.
Orea has been informed by the relevant sanctions authorities that they are currently reviewing the amended agreement. However, the company cannot provide a specific timeline for when a response from the sanctions authorities might be received.
The company is waiting for the Supreme Court of France to decide if it can continue its Montagne d’Or gold mining project. This project involves digging an open-pit gold mine. It has studied the area and estimated that there are about 600,000 ounces of gold in a measured portion of the rock, 3.25 million ounces in an indicated portion, and it suspects it might be around 960,000 ounces in another portion.
Orea has also identified economically viable portions with approximately 530,000 ounces of proven gold reserves and 2.2 million ounces of probable gold reserves. The calculations were based on the price of gold and different mining conditions. The Montagne d’Or ore contains valuable gold and silver and it can easily extract it using standard methods. However, it can’t proceed until the Supreme Court makes a decision about the mining permits.
Orea Mining shares were flat on Monday at $0.035 on the Toronto Stock Exchange.
Overland map of French Guiana. Image via Orea Mining.
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French Guiana offers both large scale and artisanal mining
Mining in French Guiana dates back to the late 19th century, and is known for its rich gold deposits. These have attracted both large multinational mining companies and smaller-scale artisanal miners.
The Montagne d’Or project is the biggest project operating in French Guiana, but others include Dieu Merci, La Victoire and Renaissance concessions in the Saint-Élie region, which are owned and operated by AuPlata Mining Group (Euronext Growth: AMG).
Alongside these larger ventures, there is also a significant artisanal and small-scale mining sector, where local communities and individuals engage in traditional gold mining methods. However, the industry has also raised environmental and social concerns, with efforts being made to promote responsible and sustainable mining practices, especially in the larger-scale projects.
The French government oversees the mining sector in French Guiana and imposes regulations to manage and control mining activities, including requirements for environmental impact assessments, permitting processes, and adherence to international mining standards.
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Rare Earths Investor
July 25, 2023 at 4:33 am
Even if OREA is able to get the go-ahead from CAD, UK, US, EU, etc., over its agreement with NG, remember the French gov said ‘no’ to the OREA/NG mine back in 2019. The exploration licenses even if ratified by the Supreme Court will mean nothing if the Macron gov’ won’t give the go-ahead for the mine (and they ran on this mine denial as one of their election platform issues). We will see.