Although the concessionaire Petaquilla Minerals says it is complying with the requirements of the government, the possibility of canceling the concession is being studied.
The 180 day period which the Ministry of Trade and Industry (Mici) awarded in January to the conessionarie Petaquilla Minerals to resolve its financial problems has come to an end, and the government could revoke the concession granted in 1997.
Between January and April this year, mining sales totaled $71 million, $20.8 million less than that recorded in the same period in 2014.
The report by the Central Bank of Honduras said that the decline was mainly because so far this year they have not been exporting iron oxide due to the temporary closure of the companies dedicated to this sector because of the implementation of new extraction methods.
Low gold prices and weaker external demand account for 14% of the annual fall in the export of metal products for March.
In the first quarter of 20,700 ounces of gold were exported, down from the 73,800 ounces sold in the same period in the previous year. The main reason behind this decrease is the fall is the international price of gold, which has remained low over the past year and part of this year.
The mining company HEMCO has announced it will gradually be reactivating its activities in the Bonanza gold mine, after they were stopped due to disturbances caused by artisanal miners.
Mining operations will resume completely in approximately five days, relying on the support and confidence shown by the Nicaraguan government.
The Colombian company HEMCO has suspended its activities due to violence shown by a group of artisanal miners who blocked the exit of materials and destroyed company property.
Aiming to ensure the safety of its employees and raw materials which are highly toxic, the Colombian mining company has suspended operations until the violent environment that they faced, which is affecting business and the economic climate of the municipality, has been stablalized.
The Colombian company Mineros SA, owner of HEMCO in Nicaragua has announced that it will reduce investments in Colombia and focus on operation of the gold mine La Bonanza, in the Central American country.
From a statement issued by Mineros S.A .:
At the Annual Shareholders' Meeting of MINEROS S.A. held yesterday at the Country Club Ejecutivos, with the administration headed by Beatriz Uribe (who is conceding her post as CEO to Andres Restrepo from next May 1) confirmation was given to the partners that the company will reduce investments due to volatility in the price of gold.
The mining company is progressively reducing gold extractions and will achieve total closure in 2017, while efforts begin to recover the area.
During 2013 202.200 ounces of gold were extracted, while in 2014 a decrease was reported of at least 185,000 ounces. It is expected that production this year will be equal to or lower to those last year and 2016 is expected to be the last year that extractions will be made, projecting approximately 150,000 ounces.
Businessmen are complaining that there are over one hundred applications for licenses which have been approved by the Attorney but are pending review and approval by the Ministry of Energy and Mines.
Mining companies in Guatemala say that one of the reasons for the delays in the process for obtaining mining exploration licenses is because the government does not support this sector of the economy.
As part of the restructuring process to reactivate the operation in the gold mine, Petaquilla Mineras has appointed Arenisca Properties S.A. to manage works at the mine.
The company Arenisca Properties S.A., responsible for reviving the mining operation, "... Is a shared partnership between Petaquilla Minerals and the investment fund Baseline Financial Group.
The concessionaire B2Gold expects to invest $44 million this year in the La Libertad, Santo Domingo and El Limón mines, while HEMCO SA plans to spend $14 million on the operation of the Bonanza mine.
During the period 2013-2014 B2Gold extracted 197,808 ounces from El Limon and La Libertad mines, while HEMCO achieved a total production of 113,770 ounces.
Petaquilla Gold has been granted 180 days to catch up with outstanding payments of royalties, fees to the Social Security Department and other payments.
From a statement issued by the Ministry of Commerce and Industry of Panama (ICIM):
The Ministry of Trade and Industry announced today, to representatives of Petaquilla Gold, the decision to administratively resolve the granting of the Molejón mining project, recognizing an initial term of 180 calendar days, during which the company can rectify its faults in contractual obligations.
The operator of Molejon gold mine in Panama has announced that it has obtained a line of credit of up to $25 million to restart operations from February 1st.
Baseline Financial Group is the company that will provide an initial payment of $10 million, with a progressive investment of up to $25 million, to revive the extraction of gold from the mine. The contract stipulates that 60% of the proceeds will go to Petaquilla Minerals, 40% to Baseline Financial Group and 10% will go to the administration of a trust.
For non compliance with the deadline to deliver the financial results of 2013-2014 the securities commission of British Columbia, Canada, the trading of the shares by the owner of the Molejón mine in Panama has been suspended.
Despite having announced in September changes in company structure and operation of the Molejón gold mine in Panama, the Canadian company Petaquilla Minerals continues to face financial difficulties.
Estimates are that there are $200 billion worth of metals in the Panamanian subsoil, with copper predominating.
Although the largest proportion of mining reserves is copper, the four gold deposits identified alone are valued at about $5 billion.
Anpanama.com reports that "... The Panamanian government has granted in concession most of these deposits and their exploitation is currently in different stages, yet none have passed the stage of mining, which is when the material is excavated. At the moment Minera Panama has under construction the Panama Cobre mine which involves an investment of $6 billion.The Cobre Panama mine will be in production in late 2017 or early 2018. Another major project in gold and silver is Petaquilla Gold, which is currently paralyzed due to financial problems. "
The Ministry of Labor has retained office goods and the quarry belonging to Petaquilla Gold mining as part of measures to ensure the payment of wages of workers in the mine.
Despite rumors of the stoppage of the extraction process due to lack of capital to continue operations, the mining company is not bankrupt, but owes its employees about $3.5 million. It is expected that by 29th to 31st of October, the company will pay the fees.