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Roman-Age Gold Mine Revived by Crisis-Era Prices Draws Astur

Astur Gold Corp. (AST), a Canadian company developing what it sees as western Europe’s largest untapped gold field, expects to win a mining license in 2012 for the site on Spain’s northern coast last exploited in Roman times.

The company, headed by metals investor Cary Pinkowski, bought rights to the Salave deposit in 2010 and next month will propose a 125 million-euro ($180 million) mine project to the newly elected regional government, President Emilio Hormaeche said in a telephone interview. The previous Socialist administration rejected an open-pit mine proposal.

“We’re optimistic we can get the license with a new government in power,” said Hormaeche, who plans a less- destructive shaft mine run by locally hired workers. “What was a nice and interesting project has become something really big, a complete monster, because of skyrocketing gold prices.”

As gold futures more than doubled in the past three years, Spain’s Asturias region has drawn projects for fields first developed for the Roman Empire 2,000 years ago. The minerals- rich area regained fame in the 19th century digging coal for Basque steel mills that fed Britain’s industrial revolution, though most of those mines can’t compete at today’s coal price.

Chief Executive Officer Pinkowski, 41, forecast the Salave deposit contains more than 60 tons of gold, or about 2 million ounces. Vancouver-based Astur Gold can produce 135,000 ounces a year, which at gold prices of $1,750 an ounce will help it post $230 million in annual revenue, he said.

Second Asturian Mine

That compares with the 100,000 ounces a year that Orvana Minerals Corp. (ORV) expects by 2012 from a mountainside tunnel in the Asturian village of Boinas. General Manager Agne Ahlenius said in June that Orvana’s mine will be Europe’s largest.

Winning the license to develop Salave “will have a very positive effect on our future earnings and of course our share price,” Vancouver-born Pinkowski said. “We trade at only $35 per ounce in the ground, where fully permitted companies often trade between $200 to $400 per ounce.”

Astur Gold has surged 57 percent this year to C$1.90.

“The main catalyst for the stock is the final submission and approval of an underground operation,” Joe Mazumdar, a senior mining analyst at Haywood Securities Inc, said by phone. “The receipt of the mining permit is critical for the company.”

Engineering and construction companies such as Irving, Texas-based Fluor Corp. (FLR) have been contacted as a potential contractor for the project, which Astur Gold plans to fund with its own resources, said Hormaeche, 55, who has worked for mines in Spain and Africa since 1978.

850 Jobs

He said a decision on the license by the Asturian regional government may arrive about six months after a formal request.

During the construction of the mine, Astur Gold plans to create 850 jobs. Once operating, it will generate 250 direct jobs and another 250 indirectly, in a community of 3,900 people with unemployment of about 22 percent, Pinkowski said.

“The majority of people in the Tapia region want the mine,” he said. “This was backed by independent surveys and also recent elections results. Youth unemployment and emigration is a concern with the community.”

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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