Astur Gold Works With the Public to Unlock a Major Spanish Deposit at Salave
By Kevin Michael Grace
Nobody doubts that Astur Gold Corporation has gold in Spain—its Salave Project contains one of the largest unmined deposits in Europe. The problem has been persuading the people of Spain’s Asturias Principality that it should be mined. The challenge for Astur President Cary Pinkowski was to translate the Canadian consultative approach—what could be called social mining—to the Iberian Peninsula. He believes Astur is close to reaping the fruits of its labours.
Pinkowski is hardly new to challenges. Before he founded Astur in 2009, he founded Entrée Gold, whose Shivee West property in the heart of Mongolia’s Oyu Tolgoi Project, the largest copper-gold project in the world. But while Mongolia is a land-locked country with the lowest population density on earth, just emerging from international isolation, Asturias has been an integral part of Europe since it was conquered by Caesar Augustus 2,000 years ago.
And Asturian gold mining is as old as the Empire. According to S.J. Keay’s Roman Spain, “The size and large number of Roman gold mines [in the region] are ample proof of Rome’s financial needs during the early Empire. A recent survey listed 231 known gold mines… Pliny the Elder states that the mines in Asturias, Gallaecia and Lusitania yielded 20,000 Roman pounds of gold per month—a sizeable proportion of the state treasury’s income.” In all, the Romans took about 6.2 million ounces from the region.
Today, Salave has an NI43-101 compliant mineral resource estimate of 1,683,000 ounces of gold measured and indicated (2,155,000 tonnes grading 3.88 grams per ton measured and 15,790,000 tonnes grading 2.79 g/t indicated) and 338,000 ounces inferred (3,770,000 tonnes grading 2.8 g/t).
In 2005, Rio Narcea, which had spent 40 million Euros on Salave, had its application for an open-pit mine rejected by the regional government. The matter is now before the courts, and compensation is a possibility.
Pinkowski takes up the tale. “Rio Narcea was bought by Lundin Mining Corporation in 2007 for $700 million. There were three keys assets: Aquablanca, Tasiast and Salave. I started putting a company together in 2007 but closed the deal with Lundin late last year, just at the end of the debt crisis, when a lot of the companies were disposing of assets. Lundin is our largest shareholder [with 15.7%]. My President [Emilio Hormaeche] built Tasiast, which sold for $7 billion to Kinross a few months ago. He also built Aquablanca.”
Pinkowski says Rio Narcea “had four things going against them. They were going to build a 650-metre open-pit right on the coast. There was a real estate boom in Spain at the time, and everybody wanted a second or third home [and so wouldn’t appreciate a mine nearby]. They were going to move the workers in from elsewhere and wouldn’t be hiring any locals.”
Most important, “They didn’t do any social licence work whatsoever. There were no one-on-one meetings, no group meetings, nothing like that. So what we had to do was take modern Canadian social licensing skills and apply them to Spain: door-to-door and group presentations.” Astur has also hired two prominent Asturians as directors of communications and community relations.
Greatly in Astur’s favour is that the Spanish economy has crashed since 2005 and is now one of the most debt-imperilled nations in the EU. Asturias’ steel industry is long gone, and the subsidized coal industry will be shut down by 2014 by EU mandate. So the prospect of 250 direct and 250 indirect jobs, which will go to the local population this time, is not to be ignored in a country with 19.7% unemployment. “We’ve got a thousand CVs already,” Pinkowski reports.
We had to take modern Canadian social licensing skills and apply them to Spain - Cary Pinkowski
Astur’s revised Salave mining plan is more modest that the original. “What we’re talking to the community about is a combined mining permit, not a large open pit, not 650 metres wide, but 350 metres wide with a 2.7-kilometre underground drift going to the high grade, the 20-gram area.”
Pinkowski is confident that Salave will be in production soon. “We’re getting majority support in favour of the mine right now,” he says. “I want to see us in the construction phase in two years. If we do get permitted this month, it could be as little as 16 months.” Construction will take 18 to 24 months and cost 120 million Euros.
Despite Salave’s great promise, Astur’s share price is only 50% higher than when it went public in April, and its market cap is a modest $37 million. Pinkowski admits that Astur is burdened with the perception of “permitting risk,” but he believes this is about to change. He declares, “Once people come to Spain, or look between the lines, they’ll see this is about to happen.”
Pinkowski characterizes Astur as a “value play.” He says, “We have a world-class board for a junior company.” Directors include Sean Roosen, founder of Osisko Mining Corporation and “a genius at social licensing,” Paul Conibear, Senior VP at Lundin, and John Reynolds, former BC Minister of the Environment and federal Opposition Leader. And he points out that Astur intends to expand its deposit: “In 2005, Rio Narcea drilled a hole that hit 40 metres of 34 g/t between 250 metres and 300 metres at depth.”
He concludes that the market will recognize what Astur has and will mine at Salave: “We’re trading about $20 an ounce [gold] right now, and the industry standard is about $140.”