Aquiline dismisses Calcatreu EIS rejection as electioneering - Argentina

Aquiline dismisses Calcatreu EIS rejection as electioneering - Argentina

Tuesday, June 7, 2005

Emily Russell, BNamericas.com

Canada's Aquiline Resources (TSX-V: AQI) attributes the rejection by Río Negro provincial governor Miguel Saiz of its Calcatreu gold-silver project in southern Argentina to electioneering, company VP exploration Martin Walter told BNamericas.

"This is an election year. These things happen," said Walter by telephone from his office in Toronto.

At the end of May Aquiline submitted the environmental impact study (EIS) for Calcatreu to Río Negro authorities to be evaluated by the provincial environment commission Codema.

Saiz, elected to office in 2003 and due to serve until December 2007, subsequently rejected the Calcatreu EIS on the grounds that the company wanted to use cyanide to extract the gold. He also said he would prohibit any project that involves the use of cyanide or mercury.

"What most interests him [Saiz] is the lives of the people of Río Negro," the head of the province's press department, Claudio Mozzoni, told BNamericas.

"He says he will not change a gram nor a kilo or tonne of gold for the life of a Río Negro person," Mozzoni continued.

Mozzoni said the decision was a matter of policy and was unrelated to local elections. "Election campaigns have not yet started," he emphasized. Two of Río Negro's five representatives in the Argentine congress are coming up for reelection in October this year.

The formal analysis of the Calcatreu EIS will continue even though Saiz has given advance notice of his decision and instructed Codema not to authorize the project, Mozzoni said.

"We submitted a very comprehensive EIA to Codema and we are engaged in that formal process," according to Aquiline's Walter.

Aquiline plans to invest US$43.5mn at Calcatreu to produce 97,000oz/y of gold and 580,000oz/y of silver at average cash costs of US$191/oz over the first four of the seven-year mine life, according to the company.

The governor's decision has caused protests in the Ingeniero Jacobacci community, 80km north of Calcatreu, who have peacefully taken over the town hall. [Concejo Deliberante]

"We've worked hard to become an integral part of the community and gain a social license to operate the project," said Walter. Some 30 workers, 60-70% locals, live in Ingeniero Jacobacci, he said.

A meeting between local government officials and company workers was due to take place Tuesday evening (Jun 7) to discuss the motives for Saiz's decision and solutions to labor issues should Aquiline close its local operations, according to press reports.

Aquiline shares were down 4.07% in trading Tuesday at Cdn$1.18 on the Toronto venture exchange.