A non-brokered private placement of 42 million Pacific Rim Mining shares will result in total proceeds of Can$4.2 million for progressing arbitration at the company’s flagship El Dorado gold asset in El Salvador. OceanaGold Corporation will purchase the shares as a strategic exploration investment in return for almost 20% ownership of the high quality project.
Pacific Rim president Tom Shrake says the company is thrilled to have the backing of proven mining group OceanaGold. “This investment is a win-win for both companies. OceanaGold has the proven ability to efficiently build and operate mines in challenging jurisdictions, and we have no doubt that their expertise will be a valuable asset in support of our endeavours.”
OceanaGold’s managing director Mick Wilkes says, “We are pleased to make this investment in Pacific Rim which gives us exposure to the exploration potential in the district. We appreciate the quality of the Pacific Rim Board and management team who operate to the same high standard of environmental management and social responsibility as our own, and we look forward to seeing the El Dorado project advanced.”
The financing will allow Pacific Rim to move forward with the final stage of the El Dorado arbitration case. The company says it is optimistic the El Salvador Government will see the economic benefits of the design for the El Dorado mine, which is unprecedented in environmental consideration.
“We want to work with the government to develop a Salvadoran mining industry that places the highest priority on environmental protection and social responsibility at a time when jobs and tax revenues are so critically needed,” says Tom Shrake.
The El Dorado project area covers three exploration licences totalling 144sqkm about 65km east of the capital San Salvador. Pacific Rim suspended all drilling activity at the project in 2008, while the government considers the permit application which was made in 2004. Arbitration was launched in 2009 against the El Salvador government for its failure to properly finalise the permitting process.
The company does not intend to resume significant exploration work at El Dorado until such time as the environmental permit is received and the exploitation concession is granted, but says it will make expenditures required to keep the property in good standing.
OceanaGold is one of the Asia Pacific’s major gold producers, owning New Zealand’s largest gold mine and the Didipio project in the Philippines’ northern Luzon.