Analysts at eResearch, a Canadian investment research firm, released a cautiously optimistic report on the company earlier this month.
"Ascendant Copper is flush with cash and about to embark on an aggressive exploration program. It expects to commence drilling on one of the properties later this year, after an environmental impact study has been completed," the report stated.
The property that Ascendant is eagerly awaiting to start drilling is its Junin Project, located in Intag region of Ecuador. The report also states that "provided the Company can advance its projects forward in a timely and positive manner, we believe there is considerable upside for the [Company's] shares from current levels over the longer term."
But whether Davis' dream of turning Ecuador into "one of the world's great copper districts" may very well begin and end with his company's Junin Project.
Perception is Reality?
To determine how Ascendant's project in Junin is going, a lot depends on who you ask. According to Davis, the project has huge support from local residents. He concedes that there is a vocal opposition to the project, but that by his count it doesn't exceed 40 residents from the immediate area and 100 people altogether.
"Every project has its naysayers," said Davis.
But Davis' rosy outlook may not reflect reality on the ground. Just last December approximately 70 local mining opponents burnt down one of the company's buildings with close to 300 people taking responsibility for it. (There was a community meeting hours earlier where they all voted to burn the building as an act of protest). There is also a letter signed by all 7 local Parish government presidents asking the Ministry of Energy and Mines to invoke a 5-year moratorium on all mining activities in Intag. In addition, the company faces possible legal hurdles which include the validity of its Environmental Impact Study (EIS) as well as the possibility that the company's concessions are not legally binding due to the State violating the constitutional rights of local residents by not consulting them prior to the transaction.
"There are a lot of irregularities with the project and we want them to stop the whole process," said Isabela Figueroa, a Human Rights lawyer representing people affected by the project in Intag.
Opponents of the mine say that when the government failed to consult Intag residents before allowing the transfer of the Junin copper concessions to Ascendant, the government violated Article 88 of the Ecuadorian Constitution. The Article guarantees that any government decision that would have an impact on the environment must include prior consultation with the communities affected.
In May 2003 a Constitutional Injunction against Roque Bernardo Bustamante Espinoza (who sold the concession rights to Ascendant) was filed at the Imbabura Civil Court. The court's decision, based on Article 88, annulled the "Golden 1" and "Golden 2" concession transfers to the company. However, an appeal was filed with Ecuador's Constitutional Tribunal. The Tribunal ruled in a 5-4 decision to overturn the lower court ruling and allow the transfer of the concessions.
Ascendant's Davis argues that the government has never violated any law on the matter. "At the time that there is a proposed undertaking of concessions is when there has to be consultations, and that's what we are doing [with the EIS]," said Davis.
But Figueroa, who has worked on human rights and indigenous rights cases in Brazil, Ecuador and before with the Inter American Commission on Human Rights, said that Davis is confusing the role of the company with the role of the State. The constitution mandates that the government consult the communities, not a foreign corporation. And although the tribunal overturned the initial ruling, the decision doesn't set a bad precedent because it didn't discuss the case's merits. The ruling was based on a technicality, leaving the door open to present another constitutional injunction.
Although the tribunal overturned the initial ruling the decision doesn't set precedent, and motions are currently being filed to execute another injunction against the transfer.
Davis' mention of the company's EIS for the first exploration phase in the Junin project is causing more legal wrangling.
Figuerora, who is also working against Ascendant with fellow lawyer Alejandro Ponce and NGO's Defensa y Concervacion Ecologica de Intag (DECOIN), Comisión Ecumenica de Derechos Humanos (CEDHU) and ECOLEX-which specializes in environmental litigation, believes that the company failed to follow proper protocol with its EIS when it failed to get consult the communities regarding the Terms of Reference (ToR). The ToR's essentially outline how and what the company will study regarding the project's impact on the local environment. Ascendant is also required to have the ToR's approved by the Ministry of Energy and Mines prior to beginning the study. The company has already made the EIS public.
An April 20, 2006 letter sent to the Ivan Rodriguez, Minister of Energy and Mines, by presidents and representatives of local communities, parishes and the Municipality of Cotacachi, states that "by attempting to publicize it in our zone, the company is not only committing illegal actions that are also legal reasons for nullification, but also generate confusion within communities in the area, that could lead to tension that is the concern and duty of all public authorities?to prevent."
Davis said that he interprets the law to mean that the ToR's need to be approved before the EIS is socialized, not before work on the EIS can begin. He said that any discrepancy with the law was due to miscommunication. The company has submitted the ToR's with feedback from the community to the MEM and he said he believes that he will get approval "any day now."
He added that not having it approved doesn't negate any of the work already done on the EIS. The company has already taken water, air and soil samples, as well as flora and fauna.
Figueroa said that Davis is wrong with his interpretation and is arbitrarily choosing which laws his company decides to follow.
"Mr. Davis is just declaring his company acted against Ecuadorian law. Not only must the ToR's be approved before the EIS socialization, but before its elaboration," said Figueroa. "That's stated in Article 20 of Unified Text for Secondary Environmental Legislation."
Davis said that after the Ministry of Energy and Mines approves the ToR´s the company will make any necessary changes to the EIS and set up an office in Garcia Moreno for two weeks to socialize the document and elicit comment from the public. The company is required to present the report in non-technical, accessible language. Although most people in the area don't have a high school education, Davis is confident the report will be readable.
"I think most people on the street will be able to read it and understand it," said Davis.
Legal claims have been filed to nullify the study's ToR's and Figueroa is awaiting response from the Ministry of Energy and Mines and other government officials.
In addition, there are also disputes over the company allegedly purchasing land designated for agricultural use, as well as the project possibly violating an ecological ordinance passed by Cotacachi County that designates the area an ecological zone where mining is prohibited.
Environmental Concerns
Friends of the Earth-Canada (FOE-CA) and MiningWatch Canada launched "No Means No to Ascendant Copper in Ecuador" campaign on May 3 and simultaneously released a new documentary titled "The Curse of Copper" which can be viewed at www.ascendantalert.ca . The campaign urges the Canadian junior mining company to respect the wishes of local communities and local environmental laws.
"The Intag Cloud Forest is blessed with some of the most important biodiversity on the planet," said Beatrice Olivastri, Chief Executive Officer of FOE-CA. She said the company should respect the wishes of the local community and leave immediately.
"What part of no does Ascendant not understand?" asked Oliverati.
Davis dismisses most of the environmental concerns as "rhetoric" and "overstated."
"This is not a pristine area," said Davis.
But he also added that the company is committed to protecting the environment. He said that despite popular beliefs no cyanide will be used at the mine. He also said that mines today are zero discharge-that no water is ever released from mines.
Carlos Zorrilla, Executive Director of DECOIN, said that Davis is wrong on every aspect of his environmental analysis. He points to an evaluation of the local environment by the Ecuadorian Environemnetal Organization Jatun Sacha. In a June 2005 study called Estudio de la Caracterizacion Ecologica de la Reserva Comunitaria Junin (Study of the Ecological Characterization of Junin's Community Reserve) the organization found that the area contained 60.3 percent primary, or "natural forest" and another 16.3 percent "slightly disturbed natural forest."
Zorrilla said that Davis will never admit that the area is primary forest or "pristine" because it would cause problems for the company. Zorrilla also scoffs at the notion that there would be no water run-off at the mine. He said that because of the vast amount of rainfall in the area along with the large amounts of subsurface water that there is no way that there will be no discharge.
In addition, he points to an EIS conducted by the Japanese mining company Bishi Metals. The company's study concluded that there would be contamination of water supplies, as well as other environmental destruction such as massive deforestation and climate change. The company owned the concession in Junin in the 1990´s before leaving after a couple hundred local residents burned the company's mining camp down. Ascendant recognizes this (on its website) as a "major revolt by local communities," yet Davis insists that any current opposition, despite larger numbers, is a minority voice.
Davis said that the operation is only in the first phase of exploration and that there will be at least two other exploration programs over the next four years before any decision is made regarding the possible commercialization of the project. And he said that this remains a "big if."
Yet if the mine does become commercialized he believes that it would bring many benefits to the local communities from the development that would accompany it. By his approximation the mine would last between 40 and 80 years.
"If the mine becomes commercialized it would bring hospitals and service organizations, as well as Wendy's and McDonald's," said Davis.
Cyril Mychalejko is the assistant editor of www.UpsideDownWorld.org , a website uncovering activism and politics in Latin America. He is currently based in Ecuador.
