Letter from Auki Tituaña, Mayor of Cotacachi County, Ecuador to the British Columbia Securities Commission

Unofficial translation

Mr. Darcy Krohman
British Columbia Securities Commission
Vancouver, Canada

Cotacachi, 19 September 2005

SUBJECT: Ascendant’s Revised Prospectus

Dear Sirs,

In the name of the Cotacachi Local Government, our most cordial and sincere greetings.

In light of the fact that Ascendant Copper Corporation has presented a “new version” of its prospectus for you to evaluate, and we feel it is fair and correct that before you accept to negotiate, or prior to evaluating the prospectus’ merits, you should first be fully aware of our criteria and of our firm and transparent position regarding the mining company and the mining project, including legal, social and environmental issues affecting our local government and communities in Cotacachi County.

On a number of occasions, in official sessions of our local government, we’ve received the unanimous support of all council members to back the legal actions taken by communities against the mining project in the Intag area. Below I include just a few of the many measures taken.

• The Cotacachi Municipal Council, made up by seven councilpersons, has unanimously resolved to express its full and unconditional support to all the legal, environmental and social measures undertaken in defense of the community’s collective rights, threatened by mining activities. In addition, in the Ordinary Session of 24 January 2005, the Council resolved unanimously to support unconditionally all the legal, environmental and social measures undertaken in defence of the community’s collective rights threatened by mining activities. The Council also resolved to create the Permanent Natural Resources Management Commission, whose principal mission is to promote conservation of natural resources and use whatever legal mechanisms are required to reject actions that threaten our natural resources.

• On May 12, 2005 exercising our right and responsibility to protect the County’s environment and health of our citizens, and exercising my lawful right to uphold the Constitution and the law, the Municipality of Cotacachi presented a lawsuit against the Pichincha Regional Mining Directorate before the Ministry of Energy and Mines in order to nullify Ascendant Copper Corporation’s mining concessions. The Municipality’s lawsuit was based on the national government’s violation of article 28 of the Environmental Management Law, and article 88 of the Constitution, and other legal bodies, which prescribes to the State the unavoidable responsibility to assure communities are previously consulted when a project threatens to impact their environment, under the risk of making it non-executable, and incur in illegalities, therefore, the mining concessions Golden 1 and Golden 2 transferred to the transnational Ascendant Copper Corporation, supposedly to be negotiated in the British Securities Exchange Commission, are riddled with illegalities, according to the mentioned legal norms.

Besides the above-mentioned measures, on April 2000, the National Official Registry published the Cotacachi Ecological Ordinance, thereby officially legalizing and recognizing the Ordinance as a lawful local law. The mining project belonging to the mining transnational Ascendant, would violate several articles of the Ordinance, including:

a) Article 39, which prohibits state decisions which can affect the environment without obtaining the community’s criteria.

b) Article 43, prohibiting industrial activities that threaten to introduce cyanide, mercury, lead, cadmium and other heavy metals into the environment.

We take this opportunity to remind you, as we have in previous letters, that section ‘a’ of Article 11 of the Mining Law requires a previous authorization from the Mayor in order to undertake mining activities in villages, towns and cities. This Mayor’s office, to date, has not received any notification requesting the required report, as mandated by the law in the case of mining projects.

The rejection by our government to the mining projects and Ascendant is not based solely on the way the company has behaved in our county, nor on legal grounds, though there are reasons enough. It is also based on the continual rejection of mining in the Intag region as expressed by Cotacachi’s civil society in open and democratic forums such as the yearly ‘Asamblea de Unidad Cantonal’, which is attend by hundreds of representatives from communities, Parish Governments, non-governmental organizations, and municipal authorities, as well as national and international observers, to discuss local government policies. Ever since the 1997 Assembly, and in every single one after in which the subject of mining in Intag has been brought up, the majority of participants have supported the communities’ struggle against mining. It is, therefore, irresponsible for anyone to claim that only one or two organizations in Intag are in opposition to mining; without a doubt, it is the majority of Cotacachi’s civil society who oppose deforestation and the destruction of our unique and rich natural environment.

It is also necessary to inform you that, since June of 2005, the Congressional Civic Anti-Corruption Commission of Ecuador -CCCC- commenced an exhaustive investigation of corrupt procedures having to do with the whole process of mining concessions in the Intag area of Cotacachi County.

It is lamentable and repugnant that the presence of Ascendant Copper Corporation, in our county jurisdiction, is responsible for causing grave conflicts when attempting to divide and confront our population with aberrant mechanisms such as buying goodwill, gift offers, using public educational installations to offer sinecures, making themselves out to be economic saviors, even relying on people connected to the drugs trade, corrupt ex-military personnel, corrupt politicians and frustrated ex-candidates who only know how to use people in order to increase their own economic power, knowing it implies the slow death of all the county; this situation intensifies even more with the outrageous attitude of Ascendant Copper Corporation mining company of buying vast areas of forestry and agricultural lands.

The opportunity of acting with justice and respecting national and international law rests in your hands by avoiding the trading of Ascendant Copper Corporation’s securities through the British Columbia Securities Commission.

It is the intention of the Cotacachi County government to continue supporting the legal and conscientious resistance to the Junín mining project and will not give up our strong conviction to defend our mother earth, and will utilize any legal mechanisms in our positive Ecuadorian law and other international treaties of which Ecuador is party to.

Sincerely,

AMA KILLA, AMA LLULLA, AMA SHUA
DON’T BE LAZY, DON’T LIE, DON’T STEAL

Auki Tituaña Males
Mayor of Cotacachi
COTACACHIMANTA JATUN PUSHAK

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