April 22 (Bloomberg) -- Ginguro Exploration Inc. will sign an initial agreement with Latvia to gather data for a possible mine the Canadian company said could be a world-class resource.
“We gave support for the economy minister to sign a letter of intent without the state taking on any commitments,” Prime Minister Laimdota Straujuma told reporters in Riga after the government made the decision to sign the letter of intent.
Latvia’s western region of Kurzeme contains rock formations similar to areas that have yielded nickel, copper and palladium in the Nordic countries, according to surveys of the region, said Ginguro Executive Chairman Wayne Whymark. The possible resource, below a layer of limestone about a kilometer (0.6 mile) thick, has remained untapped because of the cost and technological challenges of getting at it, he said.
“The geological structure has all the things required to host a world-class structure, but it doesn’t mean it’s there,” he said in an interview yesterday. “There could be another Norilsk here,” he said, referring to a mine operated by OAO GMK Norilsk Nickel that helped make the Russian company the world’s largest producer of the metal.
Ginguro plans to create a database for the mine and then explore Soviet-era drilling holes and eventually do additional drilling as the law allows, Whymark said.
The find would have to be “world-class” to justify mining at such depths, he said. He estimated the cost of a mine at about $3 billion.
Latvia still needs legislation on mineral rights before money could be found to fund the exploration and eventually the dig, he said.
To contact the reporter on this story: Aaron Eglitis in Riga at email@example.com
To contact the editors responsible for this story: Balazs Penz at firstname.lastname@example.org Alex Devine, Tony Barrett