The neighbors of this Chubutense city are facing another mining project that intends to come and exploit gold.

The Patagonia will be what its inhabitants decide, but not Patagonia Gold

Recently the company with headquarters in London, Patagonia Gold[1], acquired several mining properties located in the mountain chain of Esquel, Nahuel Pan and Rivadavia. These mining projects, with the sole purpose to extract gold, are similar to the failed gold site of the Canadian company Meridian Gold, which has suspended its activities due to resistance by the people of Esquel and other towns along the mountain range of Chubut.

The gold deposits "Huemules"[2] that Patagonia Gold intends to exploit through its subsidiary Minera Huemules S.A., is located 20 kilometers northwest of Esquel, 28 km. south of Cholila and 30 km. north of Trevelin. It is situated in the division of waters with Lake Futalaufquen, in Los Alerces National Park, from which it is merely 7 km. away.

The local provider of drinking water (Coop16) is advancing in its project for the provision of water in the city of Trevelin, which will be situated in the Percey River. The mining project Patagonia Gold wants to undertake is located on the source of this very same river. In addition, the brand-new irrigation channel system of valley 16 de Octubre, where Trevelin is located, also carries water from this river, both situations will surely generate the opposition of the inhabitants of this mountain range city.

Stockholders of Patagonia Gold confirm the reinitiation of the project in Esquel
(June 2006)

Carlos Miguens, head of the Bemberg Group and recent ex owner of Cervecerías Quilmes (breweries), announced that he will reinitiate the mining exploitation of the gold deposits of Huemules, which has been stopped for 10 years in Esquel, province of Chubut, Argentina. They possess license to 550,000 hectares in the Patagonia, turning them, along with the Benetton Group, into one of Argentina's major landowners.

Miguens owns the majority of this site: personally, he owns 40% and is, in addition, the majority stockholder of Patagonia Gold, a consortium with headquarters in Great Britain that owns the remaining 60%.

"We have evaluated the project and we are sure of the potential (...).Our main priority is to tend to the interests of the community that lives in this area and to completely preserve the ecosystem," said Miguens, in a press conference. "Patagonia Gold has guaranteed that the production is entirely subterranean and that cyanide will not be used in the process," he added.

During the same press conference the company declares the following:

Huemules S.A. has 14 gold deposit sites under its name, Leleque Exploraciones S.A. 20 and Minera Nahuelpan S.A. 11.

Patagonia Gold and its companies have gold deposit sites in Chubut and in lesser quantity in Rio Negro and Santa Cruz.

Those that are of greater importance to them are Huemules, Crespo Hill and Gastre. It all adds up to 583,400 hectares in Patagonia.

They provide more details about the gold deposits in Huemules than any others that they describe (with an aerial photo, a diagram of the seam and reserve details):

1 that it is a seam 3 km. long and 20 km. wide.
2 that it has gold, silver, copper, zinc and lead as well.
3 that the reserves that were estimated last year by a consultant is of 116,773 ounces of gold.

Textual: "The contract for access was negotiated satisfactorily with the landowners in Huemules and the work plan for the restoration of the access roads and the repairs for damages caused by previous mining were accepted. A request for a reopening and extension of the EIA of Meridian Gold of 2003 was presented to the government department of mines in Chubut (Dirección de Minas de Chubut) and we are waiting for its approval."

Among its Argentinean stockholders, the majority stockholders are Carlos Miguens and Gonzalo Tanoira (financial director), along with Maria Luisa Miguens de Tanoira, Cristina Miguens and Diego Miguens.

They also affirm that they invest considerable time and resources in relation to the community to create support for their activities, and that has allowed them to obtain 6 approvals from the EIA for perforations in Rio Negro and Chubut and that these "campaigns" are well on their way in Crespo Hill, Gastre and Morro Hill in Río Negro.

By the hand of the governor and the mayor

Since 2003, law 5001 has been in force in the province of Chubut. This law prohibits the mining exploitation in open air and the usage of cyanide in mining. The gold deposits are located inside the municipality of Esquel and the city has a series of bylaws that prohibit these types of mining activities and even the use and transport of supplies and elements for the same.

Despite everything, the government of Mario Das Neves renews their license for the exploitation of Minera Huemules S.A., and Mayor Williams grants this mining company the commercial right to his business.

Negotiations with the Government
(October 2006)

The mining companies in Chubut are not waiting. They are working actively to win the approval of the government of Mario Das Neves. While the company of the failed gold deposit site of the mountain chain of Esquel, Meridian Gold, still retains the concession of the government and maintains offices and deposits in this city, the mining company Patagonia Gold, made public on its website it will negotiate with the government of Mario Das Neves to obtain the acknowledgement that mining is sustainable and positive for the Chubutense people, even proposing the signing of a code of conduct for mining.[3]

The British Patagonia Gold, has a license to search and explore about 384,353.34 hectares according to mining land records of the province, including the Huemules deposits of gold, silver and copper, at a distance of 20 km. from Esquel.[4]

The inhabitants of the province and particularly those of the mountain range region have been complaining that the practices of the mining industry has laws that come into opposition with the interests of the communities. They believe the mining is responsible for consuming such high quantities of water and also for its contamination, in addition to being the cause of ruining productive activities that are truly sustainable and for displacing communities and its inhabitants, just as it is proven in other countries and even in other Argentinean provinces.

A three year suspension of the mining activities of a portion to the west of the province has been established by law 5504, it is seen by the people, as it was openly stated by Patagonia Gold during their press conference, as a means to buy time and agree with the mining companies, from a government's office, the regions that will come under a legal umbrella.[5]

This will do nothing less than to break up the territory of Chubut into as many portions as the mining companies need and to legally enable them to loot and contaminate them, as well as to create some isles with certain restrictions. The mining companies in Chubut are not waiting, they are working actively to achieve the approval of Mario Das Neves' government, and, at the same time, they want to silence the increasing social complaints against the activities, which will benefit the participants on both sides.

SELF-SUMMONED ASSEMBLY OF NEIGHBORS OF ESQUEL

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[1] The Bemberg-Miguens Group owns 45% of Patagonia Gold S.A. stocks, the rest is in the hands of investors from Great Britain (go to http://www.patagoniagold.com/english/company.php and http://www.patagoniagold.com/Backoffice/pdf/86_Adquisicion.pdf). In addition, this group was the majority stockholder of Quilmes breweries (Quinsa), invested on BISA stocks and, along with Rocca (Techint) and Schmidheiny (Fundación Avina), it contributed capital for the restructuring of the journal La Nación, and it has been speculated about the possibility that this kind of capitalization will turn them into co-owners of the journal. For more information go to http://www.weblog.com.ar/000137.html.

[2] It was explored and partially exploited during the 80's and the 90's by other companies extracting minerals that were processed outside the province (7,700 ounces of gold, or 215,6 Kg.). It was later turned into the hands of Minera Huemules S.A. which made further explorations between 1998 and 2003. Since the end of 2005 Minera Huemules belongs to the English Patagonia Gold.

[3] For the complete article of the press conference given by Patagonia Gold, go to: http://www.patagoniagold.com/Backoffice/pdf/100_2006_08_25_Accion_de_Amparo.pdf.

[4] To see the land records of Chubut and its analysis, go to: http://www.noalamina.org/index.php?module=documents&JAS_DocumentManager_op=viewDocument&JAS_Document_id=38

[5] Article 2 of law 5504: Within the time period stated in Article 1 of the present Law, the Executive will elevate the Legislature for its approval, a map of environmental-mining legislation, establishing for the territory the mineral substances and conditions and methods of the mining activities to be developed by each area.