LONDON, Dec 4 (Reuters) - Burnt by past experiences in emerging countries, the Canadian mine explorer which discovered Ecuador’s largest gold project is hoping to find greener pastures in the lush valleys of Northern Ireland.
Dalradian Resources Inc, a small company already listed in Toronto and admitted this week to trade on London’s junior AIM market, is betting that its Curraghinalt deposit in the centre of Northern Ireland can become one of the biggest gold producers in Europe.
The company’s management previously headed Aurelian Resources, which found Ecuador’s Fruta del Norte then sold it in 2008 to larger gold miner Kinross in a $1.2 billion deal.
A change to mining laws in the country had convinced the company that holding on to the asset was too risky for a junior miner, said Patrick Anderson, who headed Aurelian and is now Dalradian chief executive, in an interview.
Kinross also experienced difficulties and went on to sell Fruta del Norte for only $240 million after a deadlock with the government on taxation.
“Previously we had been working in Venezuela and had a similar experience, so the mandate that we set ourselves ... was to find some place were the rule of law applies, where there is an able and willing workforce and a government that wants you to be there,” Anderson said. “Then we found this deposit. Similar deposits in Canada have been in production for decades.”
Gold is already being produced in Northern Ireland, but on a small scale, at the nearby Galantas open pit mine, which produced about 1,400 ounces last year.
Curraghinalt would be the first to produce gold in Northern Ireland on an industrial scale, Anderson said.
The development of the deposit, which had been discovered in the 1980s, has been delayed due to restrictions on the use of explosives due to the years of violent political upheavals in the area. This made it too hard to explore underground.
Dalradian is now seeking planning permission to build the mine, at which it says production could start as soon as 2017 at an average of 162,000 ounces a year over an 18 years mine life.
Anderson was untroubled by the recent fall in bullion prices and said the mine, with an all-in sustaining cost of about $800 an ounce, can make money even if bullion falls below $1,000. Gold is currently trading around $1,200. (Editing by David Holmes)