Source: mining journal, www.miningjournal.com
Issue: 7th July 2006

The provincial government of Chubut, Argentina, has passed legislation to “suspend for a term of thirty-six months” any metal-bearing mining activity, except that related to alluvial deposits, in an area in the northwest of the province.

The area lies between parallels 42° and 44° 30′ South, meridian 70° 30′ West Longitude, and the border with Chile. Meridian Gold Inc’s troubled Esquel gold project is in the middle of the area, which also includes several exploration properties held by Patagonia Gold plc. The latter’s ground includes its Huemules and Crespo projects, and the Leleque and Nahuel Pan areas.

BNAmericas reports that the legislation still awaits promulgation by the executive of Chubut, but Patagonia Gold will now concentrate its efforts on other properties outside the exclusion zone in Chubut, such as its Gastre and El Morro projects. In addition, it intends to divert its resources in Argentina to exploration in other provinces.

Meridan’s Esquel project, acquired in a takeover of Brancote Holdings over four years ago (MJ, April 12, 2002, p257), has been suspended for about three years, following determined opposition by the local community. The company’s conduct was heavily criticised by its own consultant, retained to identify concerns regarding the development of the project (MJ, August 15, 2003, p114).