Ecuador’s President questions Dundee’s Loma Larga Mine

Ecuador’s President Daniel Noboa casts doubt on DPM Metals’ Loma Larga gold project in Azuay amid protests and water supply concerns.

Ecuador’s President Daniel Noboa has cast fresh doubt on the future of DPM Metals’ (TSX: DPM) Loma Larga gold project, handing over decision-making power to provincial authorities in Azuay.

The move follows mounting pressure from local leaders, who last week urged Environment Minister María Luisa Cruz to revoke the project’s recently granted environmental license. On Tuesday, thousands of residents joined the “March for Water” in Cuenca, the provincial capital, denouncing the $419 million underground mine and warning it could threaten the region’s water supply.

Environmental concerns vs. technical data

Environmental groups argue that mining within the El Cajas Massif Biosphere Reserve is incompatible with water protection. However, experts note that the Loma Larga concession lies outside the official water recharge zones established by Ecuador’s environment ministry in 2012.

DPM Metals insists it has monitored water quality in the area for two decades and plans to recirculate 90% of the water it uses in its operations, minimizing environmental impact.

President Noboa has requested provincial authorities provide technical reports and formal resolutions regarding potential contamination risks, local media reported.

Historic consultation process

DPM Metals, known as Dundee Precious Metals until last week, acquired Loma Larga in 2021. That same year, former presidential candidate Yaku Pérez and civil society groups filed a lawsuit alleging environmental and human rights violations. A provincial judge dismissed the claims but ordered a free, prior, and informed consultation before the mine could proceed.

In May, Ecuador’s Ministry of Energy announced the completion of that consultation — the first of its kind for a mining project in the country.

High stakes for Ecuador’s mining sector

The Loma Larga deposit hosts an estimated 926,000 ounces of gold, with planned production of 200,000 ounces annually during the first five years, and an average of 170,000 ounces over the following seven. The site also contains copper and silver, alongside a processing plant and tailings facility.

Observers warn the project could mirror the fate of the Río Blanco mine, also in Azuay, which was suspended by a 2018 court ruling and later overtaken by illegal miners.

Despite local opposition, Loma Larga is one of six strategic mining projects in Ecuador expected to advance to construction or production in the coming years. Others include SolGold’s Cascabel, Silvercorp’s El Domo, Lumina Gold’s Cangrejos, Atico Mining’s La Plata, and Solaris Resources’ Warintza.

Earlier this month, DPM Metals strengthened its global portfolio with a $1.25 billion acquisition of Adriatic Metals, adding advanced projects in Bosnia and Serbia.