WHY NICARAGUA?

Nicaragua is the largest nation in Central America and is located in the heart of the isthmus between North and South America. It is bordered by Honduras to the north and Costa Rica to the south. Spanish is the official language, though English is widely spoken.

Originally a colony, Nicaragua claimed its independence from Spain and became a republic in 1821. It is a constitutional democracy with Executive, Legislative, Judicial and Electoral branches of government. It has had a democratically elected government for the past 20 years and is considered to have low sovereign risk. It is a safe country with the Economist Intelligence Unit rating it safer than Brazil, on par with Chile and significantly safer than Columbia.

Nicaragua was the 8th largest gold producer in the 1950’s, but due to its civil war in the 1970’s and 1980’s exploration and production virtually ceased. As a result it has missed all the resource and exploration booms that have occurred over the last 40-50 years.The gold mining industry is the second largest exporter by value for the country and enjoys significant government support.

  1. Nicaragua has a strong history of gold production
  2. The country is under explored relative to other countries in the region
  3. It has an attractive mining sector and encourages foreign investment
  4. Stable political environment
  5. One of the safest countries in Latin America
  6. Encourages foreign investment

1. Gold Production

Nicaragua has a long history of gold mining since the Spanish Conquistadors in the 1600’s. Nicaragua was globally the 8th largest gold producer in the 1950’s, but due to its civil war and political uncertainty during the 1970’s and 1980’s gold exploration and production virtually ceased.

Major Nicaraguan Gold Mines and Projects

Major Nicaraguan Gold Mines and Projects

The country’s overall mineral endowment easily outstrips that of all other countries in Central America. At least five deposits containing over 1 million ounces of gold have been discovered in Nicaragua, and the country’s total recorded gold production is over 14 million ounces (see graphic below). Under the current pro-business government there has been a resurgence of gold production over recent years with three mines re-opening. This has resulted in gold becoming the third largest export by value for the country in 2015.

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2. Exploration Potential

During the gold mining and exploration boom that occurred throughout most of the Americas in the 1980s, Nicaragua was still gripped by political instability. As a consequence mineral exploration and mining in Nicaragua languished. The country missed much of the global resource and exploration activity that has occurred since the 1970s.

As mentioned above, the gold sector has experienced an upsurge over recent years with production from three key mining operations  – La Libertad (B2Gold), El Limon (B2Gold) and Bonanza (HEMCO/Mineros). Nonetheless, modern exploration, outside of the areas immediately surrounding these mines, has been piecemeal and the country is ripe for new gold discoveries.

While Nicaragua’s historic base metal production is not very significant, the country’s geology favours the occurrence of undiscovered silver, copper, zinc and nickel deposits. In addition to gold, significant deposits of these metals are present in Honduras and El Salvador to the north and Costa Rica and Panama to the south.

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3. Attractive Mining Sector

When a new government was voted into power in the early 1990’s, the attraction of foreign capital and expertise to help resurrect the country’s mining industry was a stated goal. To that end, Nicaragua enacted modern mining and business laws in 1992 that are among the most favourable in all of Latin America. These laws, combined with the country’s rich mineral endowment and a lack of modern exploration give Nicaragua a higher prospectivity for exploration success than any other country in the region.

The mining sector in Nicaragua enjoys significant government support and has attractive business conditions:

  • Income tax rate of 30{03676bc8fca92e3a57550d4d1de8e6093c362d4ae16ae8d14aca134568ce2f00}
  • Mining royalty rate of 3{03676bc8fca92e3a57550d4d1de8e6093c362d4ae16ae8d14aca134568ce2f00}
  • Mining concessions valid for 25 years with possible renewal for another 25 years

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4. Stable Politics

Originally a colony, Nicaragua claimed its independence from Spain and became a republic in 1821. It is a constitutional democracy with Executive, Legislative, Judicial and Electoral branches of government. It has had democratically elected governments since 1990.

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5. A Safe Jurisdiction

Nicaragua is the largest nation in Central America and is located in the heart of the isthmus between North and South America. It is bordered by Honduras to the north and Costa Rica to the south. Spanish is the official language, though English is widely spoken.

Nicaragua is considered to have low sovereign risk. It is a safe country with The Economist Intelligence Unit rating it safer than Brazil, on par with Chile and significantly safer than Colombia.

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6. Foreign Investment

Nicaragua has made important progress in the improvement of its investment climate in an effort to continue attracting high-quality foreign direct investments. The main legislation that governs foreign investment consists of Law No. 344 for the Promotion of Foreign Investments which establishes a series of solid legal guarantees for foreign investors, such as:

Full currency convertibility – Freedom to repatriate all capital and profits, dividends or earnings generated in the national territory.

Full foreign ownership permitted – There is no discrimination against foreign investors, whether on total ownership of the company or as shareholders.

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Chamber of Mines of Nicaragua
The Camara Minera de Nicaragua (CAMINIC) is an influential body representing mining industry participants, specifically on behalf of its Member companies. Oro Verde, through its wholly owned Nicaraguan subsidiary – Minera San Cristobal S.A. – is a Member of CAMINIC.