Letter from the Mayor of Cotacachi Cantón, Ecuador, to the Toronto Stock Exchange (unofficial translation)

Finance and Audit Committee
Toronto Stock Exchange
P.O. Box 450
3rd floor, 130 King Street W.
Toronto, Ontario
M5X 1J2 Canada

Dear Committee Members,

On behalf of the Local Government of the Municipality of Cotacachi, we address this letter to you to express a cordial salutation, as well as our best wishes for the successful performance of your important duties.

By means of this letter, we seek to inform you about the serious problems we are facing in Cantón Cotacachi, particularly in the Zona Intag territory (Sacred Valley, a Ecological Treasure of Humanity). Due to Ascendant Exploration Mining Company’s presence in this area as well as their plans to place a supposedly “new” company, Ascendant Copper Corporation, on the Toronto Stock Exchange with the principle objective of creating a copper mine in our territory, the human, environmental and social rights of most of our communities are being violated, and they are in overt violation of the Constitution of the Republic of Ecuador.

We consider it to be appropriate and fair that before accepting open “trade” of Ascendant Copper Corporation’s stocks in the Stock Market, you evaluate in depth the “new” company’s merits, and through compliance with the international technical and legal parameters, you further inform yourselves about the criteria and legal arguments, which we describe below:

1. The mining concessions obtained by Ascendant Exploration in our territory are illegal and unconstitutional, because the national government never held a consultation with the communities potentially affected by the mining project, as required by Article 88 of the Constitution of the Republic of Ecuador and several international covenants.

2. In the shady procedures through which Ascendant Exploration obtained the mining concession, the legal authorization by the Local Government of the Municipality of Cotacachi was never sought, as required by the Article 11 of the Mining Law, which literally states “(a) and according to the Attorney General’s criteria, such authorization must be obtained prior to executing the mining activities.”

3. In the same way the illegality of the mining rights acquired by Ascendant Exploration Mining Company, rooted in the fact that the previous report of the National Council of Hydrological Resources was never taken into consideration according to the Mandate stipulated in part (c) of Article 11 of the Mining Law in regard to which there are an endless number of Hydrological Resources in the area of influence of the mining activity which mainly serve as water supply for human and animal consumption.

4. I must emphasize that the mining concession granted to Ascendant Exploration, on which they intend to trade in the Stock Exchange, can be legally nullified, according to criteria established in Article 28 of the Law of Environmental Management, which determines that every activity which affects the environment and that does not include prior consultation required by the aforementioned Article 88 of the Ecuadorian Constitution, cannot be executed, and its nullification can thus be demanded. For these reasons, as the regional government that guarantees and protects the environment, we will commence the appropriate actions to obtain a legal nullification (of the concession) and will not give up our determination to struggle in order to defend our rights legally consecrated in the law, which must take precedence over any avaricious interest to take over our natural wealth.

5. Ascendant Exploration, despite having been present for about a year in the territory of Cantón Cotacachi – and particularly in Zona Intag, has not presented information about its business plans and projects, either to the municipal authorities or to the civil society organizations, as required by the current national law.

6. Ascendant Exploration’s mining concessions were granted while a legal suit by the Local Government of the Municipality of Cotacachi was in progress. This legal suit (Amparo Constitucional) was presented before the Constitutional Tribunal to demonstrate the illegality of the Ecuadorian government’s actions and those of the mining companies involved. The situation remains unresolved and will most likely remain unresolved until a true State of Legality is established, given the systematic violations to the Ecuadorian constitution by the current dictatorial regime and its group of traditional political parties.

7. Until now, the Constitutional Tribunal has not made a pronouncement regarding our petition for clarification and extension of the Tribunal’s rules regarding the “Amparo Constitucional” submitted by the Municipality, in which we demand that the GOLDEN UNO and GOLDEN DOS mining concession procedure be declared unconstitutional. These concessions granted to Ascendant Exploration are still pending the Tribunal’s resolution and thus have not been executed. Therefore there is not a legal basis for the mining exploration in our territory.

8. Ascendant Exploration has adopted, as an institutional strategy, a divisive policy through illusory offerings designed to dilute the strong conviction of the courageous Inteños, who seek to protect Zona Intag’s great biodiversity and natural wealth, provoking confrontations among the local people. We categorically reject this situation and denounce it as illegitimate and illegal, as it could even lead to the loss of human lives and the eradication of the social peace that reigns in Cotacachi, a Cantón that was declared a “CITY FOR PEACE” in 2002 by UNESCO due to its inhabitants’ qualities and convictions.

9. The Cotacachi people’s opposition to mining activity was reflected in the 2004 regional elections, when a political group that professed support for the mining suffered a decisive and humiliating defeat, as local voters massively demonstrated support of our conservationist vision based on development proposals for a sustainable and environmentally-friendly economic activity, with full respect for our rich heritage from mother earth.

10. The mining interests are attempting to create divisions in the territory of the Cantón Cotacachi. This process is based on crude criteria that are have not been approved by Ecuadorian legislation, and whose goal is to divide our Cantón and create means to achieve company profits against the citizen’s will and at a cost of the loss of unique biodiversity that in our territory, the destruction of social processes, and the sustainable development that we, the children, young people, men and women, mestizo, indigenous and black peoples from Cotacachi, are building.

11. Public denouncements of violations to human rights have been made and were documented by a respectable human rights organization from our country. The companies’ actions have been to such an extent that several communities have publicly rejected Ascendant Exploration’s presence. The strongest rejections come from the communities potentially most affected by the project in Junín, Cerro Pelado, Barcelona and El Triunfo, the same communities identified in the Environmental Impact Assessment to be relocated in case the mining project goes on.

12. Ascendant Exploration’s mining concessions are located in areas of primary forests which host dozens of threatened species and are extremely rich in water resources in danger of contamination. The Environmental Impact Assessment, elaborated by Japanese technicians in 1996, predicts dramatic environmental and social impacts, which are likely to affect collective rights and the environment. This project would violate several international covenants protecting communities from forced resettlement, and endangered species.

13. With respect to local legislation, Ascendant Exploration’s mining project would violate several articles of the Ordinance that declares Cotacachi as an Ecological Cantón. We, the local government, have the obligation and the right to protect our citizen’s health and environmental integrity. These goals are essential to for any local government. Therefore, we will not hesitate to exert our power to enforce this and other legal tools in order to safeguard our people and the environment.

14. The Municipal Council, made up of seven concejales, in its Ordinary Session on January 24, 2005, in use of the legal attributions granted by law to the municipal authority, unanimously decided to ratify unconditional institutional backing for all actions to defend local communities’ rights against the mining threat. We have also integrated an Extraordinary Permanent Commission of Natural Resources and Environmental Management, whose primary goal is to promote environmental conservation and to activate the legal mechanisms needed to reject actions attempted against our environment.

For us, the local government, it is very clear that Ascendant Exploration’s presence our Cantón has caused serious internal conflicts, divisions and confrontations among the people, generating serious and irreparable problems.

With this background exposed, we respectfully ask that Ascendant Copper Corporation not be permitted to trade its stocks in the prestigious Stock Exchange over which you preside.

With the certitude that our petition will be resolved in favor of the Cotacachi community, we thank you in advance and reiterate our best wishes.

Sincerely,

Auki Tituaña Males
Mayor of Cotacachi