Two foreign mining companies withdrew from four exploitation concessions granted by the Ministry of Energy and Mines (MEM), according to what was reported by this state portfolio in a publication in La Gaceta, Official State Gazette.
The two mining companies that withdrew from these concessions were Caliber Mining Nicaraguawhich had been awarded three of these concessions and Matuzalen Minerals (sic), who had one.
The ministerial agreement of the MEM details that Caliber Mining Nicaragua renounced the concessions in the lots called Kakau (34,146 hectares), Yalam (49,977 hectares) and Tangni (41,325 hectares).
Matuzalen Minerals For his part, he withdrew his concession in a lot called Methuselah of 7,200 hectares.
All these lots are located in the municipalities of Puerto Cabezas, Waspam, Bonanza and Rositaon the North Caribbean Coast of Nicaragua.
The MEM agreements were published in La Gaceta on Tuesday, October 25, one day after they were announced. sanctions under executive order 13851signed by US President Joe Biden, against the General Directorate of Mines (DGM), attached to MEM.
Biden expanded the scope of action of executive order 13851—signed in November 2018, by then President Donald Trump—, and now it can be sanction representatives and entities of the sectors of the Nicaraguan economy, that support the dictatorship of Daniel Ortega and Rosario Murillo.
Now, with the modification made by Biden to executive order 13851, the possibility of investing in the Nicaraguan gold industry is prohibited for US citizens.
The ministerial agreements do not detail the reasons why these mining companies withdraw from these concessionsbut point out that these abandonment requests were supposedly made since June 2022, but were officially accepted until October 25.
The only reference to which the MEM alludes is article 30 of the Special Law on Exploration and Exploitation of Mines, which cites: “In places where mining concessions are canceled or renounced or when their applications are rejected or subject to withdrawal or expiration, the area in reference will be considered free 30 days after publication from the date of publication of the declaration in La Gaceta.
The largest companies in the sector (by the number of hectares received in concession), are the Mining Group (Colombia); Caliber Mining Nicaragua and Blue Stone Gold Mining (both from Canada), and Condor Gold SA, from the United Kingdom.
Mining companies seek to reassure their investors
After knowing the sanctions, Caliber Mining Nicaragua and Condor Gold SA issued press releases to seek to reassure its investors, after studying the scope of the sanctions and warnings issued by the United States.
Caliber Mining Nicaragua issued a statement informing that after discussing it with its advisers and reviewing its operating plans, it confirmed that the sanctions “do not have a material impact on its operations in Nicaragua. complexes [La] freedom and [Mina El] Limón are operating as planned”, maintaining its plan to produce between 220,000 and 235,000 ounces of gold this year.
Condor Gold said from London that, after reviewing its current and future operations, and consulting with its advisers, the company’s board concluded that “it is unlikely” that executive order 13851, or the sanctions imposed on the DGM, “will have some impact on its current operations in Nicaragua.”
The English capital company pointed out that it owns 100% of the La India Mine, 587 square kilometers, and that “it has no commercial agreements with the Government of Nicaragua or with artisanal miners.”
“While the company has yet to fully understand the impact that the sanctions may have on its future operations in Nicaragua, the Board’s initial view is that this is unlikely to directly affect operations…because the sanctions appear to be targeted at state-owned companies. ”, specified the statement.
The efforts of mining companies to calm their investors they have not been able to prevent the collateral effects of the announcement of the sanctions from reaching their stock market operations.
Last week the shares of the four large mining companies that operate in Nicaragua and are listed on the London, Bogota and Toronto stock exchanges, suffered a relapse in their prices.
Although they managed to have a slight recovery, by the end of last week they had not managed to recover the value of their shares, even before the United States Department of the Treasury will announce the sanctions to the General Directorate of Mines of the MEM.
80% of gold is bought by the United States
In 2021, Nicaragua received 880.5 million dollars for its gold exportsaccording to the Center for Export Procedures (Cetrex).
This same entity reports that the 708.7 million exported as of September 30, 2022, represent an increase of 8.6% compared to the same period in 2021, so if that proportion is maintained, the sector could close the year with revenues of 955.9 million. , very close to the 1 billion with which the industry planned to end 2023.
Until August 2022, gold sales only in USA they had reached the 620.2 million dollars.
“The United States imports about 80% of the gold produced in Nicaragua. Gold is one of the main export products in terms of value —totaling USD 942 million in 2021— and revenue from its export has grown more than 150% since 2017”, according to a publication from the US Embassy in Nicaragua, in May. past.
According to official statistics, in 2007, 61.4 million dollars in gold were exported, and last September the amount for that item was 708.7 million dollars. This represents an increase of 1000% in 15 years.
Since January 2022, the mining industry has been in the sights of the United States, as part of its diplomatic strategy to get the regime of Daniel Ortega and Rosario Murillo to restore civil liberties in Nicaragua.
That month, the division general was sanctioned (retired) Ramon Humberto Calderon Vindellpresident of the Board of Directors of the Nicaraguan Mining Company (Eniminas), and then, in June, to his successor, Ruy Lopez Delgado as well as Eniminas herself.
