Minera de Corcoesto, a wholly owned subsidiary of Edgewater Exploration (V.EDW, StockForum), is in hot water with the ruling members of Galicia's Ministry of Industry. Talks originating in July 2013, put Edgewater and the ministry at opposite ends of the table as Edgewater was faced with new criteria in their effort to provide “proof of concept” for their intentions to develop the Corcoesto Gold Project. The Galician government put down their foot with their request, stalling the company's application for Special Strategic Process status until the new criteria can be met. So on that day, conditions were set that Edgewater had to prove their funding sources to the tune of $30 million or roughly 25% of the budget required to develop the property.
The Ministry and Edgewater met again on October 14th and Edgewater's bargaining position experienced a definite slip as they were still were unable to provide the evidentiary requests of the government. One day later, through local media, Spanish Edgewater representatives learned that the ministry was of a mind to cease any and all permitting processes Edgewater was engaged in regarding Corcoesto Gold Project. This poses definite challenges for Edgewater as the company has already invested over $20 million in the project with more than one hundred employees in the area. With an estimated cost in the neighborhood of $150 million to bring Corcoesto into full capacity production, Edgewater certainly has their work cut out for them, but their existing investment is too big to walk away from without serious, perhaps catastrophic, financial distress.
Regardless of the apparent doom and gloom, George Salamis, Edgewater CEO, while realistic, remained optimistic, “The government's halting of the project permitting process, occurring while mine financing conditions remain turbulent and before final feasibility has been achieved at Corcoesto, is problematic. However, we remain fully committed to advancing the project until all milestones are achieved. We feel this project will be a significantly positive economic driver, employing hundreds of people directly and indirectly while utilizing environmentally sound and modern technology which will benefit the people of the region for generations to come.”