London-based Ascot Mining PLC announced plans to increase gold exploration at its Chassoul site near San Ramón, northwest of the capital in Alajuela province. In a press statement released Monday afternoon, Ascot said it plans to produce 100,000 ounces of gold in 2012 and up to 250,000 ounces in 2013 at the Chassoul site.
The company has explored 12 percent of its two-kilometer concession area, and plans to explore the remaining 88 percent in the next two years.
Ascot also announced it will attempt to increase the current concession exploration area.
“Ascot is also looking to significantly increase the area of its Chassoul concession to 10 kilometers squared,” the statement read. “If successful in obtaining this increased concession area, the expanded area will be reviewed and plans for its exploration will be developed.”
Ascot’s expansion plans will come in two phases in search of primary mineralization zones. Work during phase one will include topographic mapping, satellite imagery, exploration trenching and development of new exploration tunnels, the statement said. Total cost is estimated at $1.58 million, according to a company statement.
Phase two of the exploration will include diamond drilling and gold production.
“Much of the exploration costs are expected to be recovered from production of gold obtained through the exploration process, potentially making it self-funding,” the statement said.
Snubbed by Costa Rica Before
The announcement of new exploration comes six weeks after Ascot CEO David Jackson told investors in a statement on Jan. 10 that the Costa Rican Environment, Energy and Telecommunications Ministry (MINAET) canceled two of the company’s concessions at the Tres Hermanos and El Recio sites for noncompliance with national mining legislation.
Due to an alteration of the national mining code, the two sites were cancelled because they lacked appropriate authorization from the Department of Geology and Mines, a branch of MINAET. According to Article 15 of the current Mining Code, a concession owner may transfer or lease concession rights only after receiving authorization from the geology department. According to MINAET, Ascot’s concession was not authorized.
In the Jan. 10 statement, Ascot claimed that concessions for the two mines were granted under a previous mining code. In 1982, after Ascot was awarded concessions, the code was modified to include Article 15 and the mandatory authorization by the geology department. Previous legislation did not require the authorization.
Ascot deemed the cessation of the concessions illegal.
“The company’s legal team in Costa Rica strongly believes that by applying Article 15 of the current Mining Code to the concessions of Tres Hermanos and El Recio, the ministry has implemented the law retroactively and contrary to the constitutional principle prohibiting the retroactive effect of a law against already acquired or grandfathered rights, and is therefore illegal,” the statement said.
Ascot said the company filed lawsuits against MINAET to protect its investment and to seek costs and damages related to future losses due to cancelled exploration plans. All further exploration at the sites is postponed until a resolution is reached, the Jan. 10 statement said.
“We are surprised at the actions taken by MINAET,” Jackson said. “However, we are confident a clarification of the law will bring about a satisfactory resolution of either reinstatement or financial compensation under the law as it applies to these two concessions.”
As of press time, MINAET had not responded to questions related to Ascot’s announcement of future exploration at the Chassoul mine.
