Dear Members of the Intag Solidarity Network-

The Intag Solidarity Network-USA makes the following special call for action to help defend the rights of Carlos Zorrilla and his family. We request that you both email and call the Ecuadorian Embassy in Washington, DC in order to express your concern about the violation of the civil and human rights of the Zorrilla family, as well as Roberto Castro, a neighbor and employee of the Zorrilla family.

Carlos Zorrilla is long term resident of Intag region. He is a dedicated environmentalist, a person who passionately believes in the ability of humans to co-exist in a sustainable fashion with the environment. Carlos Zorrilla is the co-founder of DECOIN. He has dedicated his life to the struggle against mining in Intag region. His work has provoked a continuous pattern of threats and intimidation on the part of those who favor mining. Since 2004, Ascendant Copper has targeted Carlos Zorrilla as the key person to remove from the struggle, mistakenly conflating grassroots resistance with the actions of a few “extremists.” Ascendant has labeled Carlos an “eco-terrorist,” and “extremist,” and has made slanderous allegations that Carlos is a criminal.

We request that you focus your statement of concern on the questionable actions of the Ecuadorian state in carrying out the raid on the Zorrilla property. We encourage you to denounce the false charges made by Leslie Brooke Chaplin, and we ask that you request that the Ecuadorian state investigate the relationship between Leslie Brooke Chaplin and Ascendant Copper. Please assert that it is your view that Ascendant Copper is the cause of conflict in Intag region, and you are concerned that the company’s presence will continue to provoke human rights violations. You can assert that Ascendant Copper is doing serious damage to the good reputation that Ecuador enjoys among United States citizens, especially as a tourist destination.

Here are the facts as we know them.

• At 6:15AM on October 17, a group of between 11 and 20 armed police officials raided the property of the Zorrilla family, located in the community of Santa Rosa, Cotacachi county, Imbaburra province.
• Eyewitnesses in Santa Rosa (about 45 minute walk to the Zorrilla property) state that the police arrived in the community in 4 vehicles, each without license plates and lacking official markings.
• Two of the police officers were wearing ski masks.
• Officers shouted at and pushed Martín Zorrilla, the 15 year old son of Carlos Zorrilla and Sandra Statz.
• After nearly an hour long search of the property, during which time the office of Carlos Zorrilla was ransacked, the police officials “discovered” a gun and a bag of marijuana. The gun was “discovered” in the room of Martín Zorrilla.
• The police officers presented papers they claimed to be warrants, but the Zorrilla family alleges that the officers would not allow them to inspect the warrants.
• There was no warrant for the raid of Roberto Castro’s house.
• Lawyers for Carlos Zorrilla have discovered that the police warrant resulted from an accusation made by a United States citizen Leslie Brooke Chaplin, who filed charges of theft against Carlos Zorrilla on August 23, 2006 for an event that happened on July 13, 2006.
• The event that Ms. Chaplin charges Carlos Zorrilla of theft was the march in Quito carried out by people from Intag who are in opposition to mining. Multiple witnesses have identified Ms. Chaplin as a person who was handing out pro-mining propaganda during the march.
• Leslie Brooke Chaplin has subsequently left Ecuador. She was out of the country by the time of the police raid on the Zorrilla family property.
• Mr. Zorrilla’s lawyers have discovered that while Mr. Zorrilla was appointed a lawyer by the Ecuadorian state, he was never notified by the Ecuadorian state that a lawyer had been appointed to represent him. Before the police raid, the Zorrilla family had zero knowledge of the charges made against him by Leslie Brooke Chaplin.
• The police raid happened one day after Ecuadorian courts declared 5 people charged with arson (burning of the Ascendant Farm in December 2005) not guilty.
• Those charged are members of the resistance against Ascendant Copper.
• At this point, Intag Solidarity Network is not directly claiming Ascendant Copper hired Leslie Brooke Chaplin to make false accusations against Carlos Zorrilla.

The respected Ecuadorian human rights organization, CEDHU, however, states in their press release of October 18, that it is “far more outrageous for our judicial and police institutions to be involved in such crooked moves against Intag residents, as eager pawns for the Ascendant Copper Corporation mining company, whose sole interest is to extract ore from the Intag zone, and make hefty profits any way they can, even if at the cost of the life, liberty, well-being and other fundamental rights of the Intag population and its leaders.”

Here is the contact information for the Ecuadorian Embassy:

Dear Mr. Luis Gallegos,
2535 15th Street, N.W.
Washington, D.C. 20009
Tel. (202)234 7200
Fax (202)667 3482
Web site: www.ecuador.org
email: embassy@ecuador.org

Quito, Ecuador

This morning, 6:30 am, about 10 persons identifying themselves as policemen, some in uniform, two with black ski masks, all armed with handguns and/or machine guns, arrived at the home of Carlos Zorilla. Twenty minutes later, another individual, who claimed to be the prosecutor from the city of Cayambe, appeared with a document he claimed to be a search warrant. They searched both the Zorrilla home and that of Roberto Castro, who has worked on the Zorrilla farm for years and who lives up the hill. Roberto asked to see identification. His request was not granted. Carlos was not at home at the time and his whereabouts are unknown. Carlos’s wife Sandy and son Martin were home and watched the policemen burst into the house and search. They tore apart Carlos’s bedroom/study. According to Martin, one member of the group was particularly aggressive, pushing and shouting at Martin, Sandy, and Roberto. The apparent leader announced after an hour that there was nothing to be found, they had other places to go to, and suggested that they be on their way. At that point, the aggressive individual walked outside with a bag of drugs he claimed to have found in the living room and a gun he said was in Martin’s bedroom. At that point the search ended and the alleged policemen left.

Other witnesses say that the police arrived in Santa Rosa that morning in a number of vehicles, none with police insignias, all without license plates, and one, a red vehicle, identified as belonging to the mining company. They also state that the day before two Ascendant employees spent most of the day in Santa Rosa.

Coincidentally (?), yesterday a judge in Ibarra dismissed charges against community residents accused of burning Ascendant Copper Corporation’s headquarters in Intag on December 10 of last year. According to Silvia Quilumbango, president of Defensa y Conservaci*n Ecol*gica de Intag (Decoin), the mining company will appeal the decision.

At the present, we need to begin an international letter-writing campaign. We suggest that you write to the president of Ascendent, Gary Davis, expressing your outrage at these false accusations designed to intimidate one of the people -Carlos Zorilla -  leading the opposition to mining in Intag. Also you can write the British Columbia Securities Exchange. Please send copies of your letter to Silvia Quilumbango – President of DECOIN  and the  INTAG newspaper (addresses below) and anybody or organization in your network who might be interested. And, as always, donations to cover legal expenses are greatly needed and appreciated.

As this situation unfolds, we will suggest more actions and how you can make donations.

Sincerely,  Sylvia M. Seger

Some contact addresses:

Gary E. Davis
President and CEO
ASCENDANT COPPER CORPORATION
10920 West Alameda Avenue, Suite 201
Lakewood, CO 80226
Tel: (303) 824-0271 Fax: (303) 297-0538 www.ascendantcopper.com info@ascendantcopper.com

British Columbia Securities Commission
701 West Georgia Street
P.O. Box 10142, Pacific Centre
Vancouver, B.C. V7Y 1L2
Canada

Peri*dico Intag
Casilla 211
Otavalo, Imbabura
Ecuador
www.intagnewspaper.org  INTAG Newspaper website

DECOIN (Defensa y Conservacion Ecologica de Intag) PO Box 144 Otavalo, Imbabura Ecuador
Phone/Fax: (5936 648 593)
Email: decoin@hoy.net and intagcz@uio.satnet.net

Update 13 September

Yesterday, September 12 a group of six persons identified as Ascendant Copper Corporation employees by Junin community members were found inside Junin’s forest reserve without authorization.  First reports tell of a confrontation between the two sides, and the six alleged employees fleeing to the forest.  The call went out and up to 70 community members pursued the group, catching up with four of them. There are reports that one of the two that escaped was armed with a pistol, and threatened a campesina from the community of Barcelona.  All involved went to the Community of Junin, where two of the four were ordered to leave the community.  The two remaining at this moment are reportedly in the general vicinity of Junin and are believed to be employees of Ascendant Copper, or one of its contractors.

Police immediately reacted to the situation, and were able to travel in several Ascendant Copper Corporation vehicles to different sites within Intag.  One of those patrols arrested two colleagues who were travelling in a motorcycle far away from the scene of the confrontation.  No reason was given by the police for the arrest.

Unfortunately, this afternoon a violent confrontation took place between a pro-mining group and a community group when this first group tried to force their way into what they consider to be company property with bedding, tents and other utensils.  The community group was able to repel the invading group, and there are reports of some minor injuries- mostly on the pro-mining side.  Several eyewitnesses reported that the confrontation took place in front of a large group of police, and that the police presence is quite large in the Chalguayacu Alto area.

There are also reports that two Ministry of the Environment employee was assaulted by pro-mining forces in the area of Chalguayacu Alto. Apparently the crowd identified the employees with the majority who reject mining in Intag.  Radio Intag broadcasted that these employees were being held by the Chalguayacu Alto crowd against their will.

As of tonight, there is a large police contingency in Chalguayacu Alto, as well as dozens of Intag residents in favor of mining.  Community members are filtering into Junin to support the community, and tomorrow a regional assembly is being organized by the newly created Coordinadora Zonal, made up of Intag’s local governments, organizations and communities, to find out the best way the rest of the Intag can best support the communities and find a peaceful solution to this latest conflict.  Two of the four persons identified as company employees are still in the Junin area, just as  pro-mining forces are gathering in Chalguayacu Alto. A delegation made up of three Parish government presidents went into Junin this afternoon to try to act as mediators and try to prevent more violence. However, at the same time we received reports, from reliable sources, that the government was considering sending in the equivalent of a SWAT team to try and rescue the two possible employees who, as far as DECOIN knows, are not being held against their will.

If you want to send a fax to Ecuador’s president asking him to find a peaceful solution to this very difficult and dangerous situation, please see below.

The president’s fax is: 593 2 258 0714

Doctor Alfredo Palacios
Presidente Constitucional República del Ecuador
Palacio Presidencial
Plaza de la Independencia
Quito, Ecuador

September 14 2006

SUBJECT: MINING IN INTAG

Dear Mr. President,

I am writing to express my concern of the threats that the Junín mining project poses to the people and environment in the Intag area of Cotacachi County, and of the recent troubling developments.

We have received reports of a grave escalation of the conflicts brought about by, what we are told, was the presence of persons identified as workers of the Mining company in lands belonging to the community of Junin. We understand there has been a violent confrontation, and urge you to do all that is possible to find a peaceful solution to this latest crisis. There can be no legitimate reason for a mining company, who has repeatedly been told they were not wanted in the area, to be in community lands unless it was to provoke a violent reaction by the communities. We are also very concerned by reliable reports that tell of the police being transported in company vehicles to different areas within Intag, and that two Intag residents were arrested without warrant or probable cause, and transported in Ascendant Copper Corporation vehicles to the police station in Ibarra. Another troubling development reported by international obervers in the Junin area is over the presence of apparently para-military personel, who were of late seen in the area, and who were identified as working with, or supporting the mining companya factor that complicates an already complicated situation, and one that is likely in violation of international treaties and national legislation.

I sincerely hope that your government is able to lauch a full-scale investigation to try to clear up these, and other troubling news recently coming out of the Intag area.

I likewise urge you to analyze carefully the long-term implications of this project to the forests of the Toisan Range, for the local communities, county of Cotacachi, and the area’s natural resources, and in general, to your country. I also support a complete investigation of the numerous human-rights violations people from communities in the Intag area have complained about as a consequence of the presence of mining companies in their territory and which have been documented by CEDHU (Comisión Ecuménica de Derechos Humanos)

Sincerely,

NEWS RELEASE: DESTRUCTION OF ASCENDANT COPPER CORPORATION’S CAMP

Due to the different versions going around regarding what happened in Chalguayacu Bajo, Cotacachi County, Ecuador, this past 10 of December 2005, in which the Ascendant mining camp was completely destroyed, we wish to let our point of view, based on the truth, be known.

In the act more than 300 local people from approximately 20 communities from the Intag area participated; mostly the ones threatened and more likely to be affected. There were no thefts of company goods, nor was there any one hurt, as the company claims. The police report confirms our version.

The decision to take this action, and for the communities to take control of the lands the company owns was taken in a democratic and participatory manner by all those present. If the company pays no heed to the clamor of the communities, these will be forced to take over other properties as the only defense mechanism.

This measure takes place after nearly two years of the presence of this company in Intag, which has caused great division in the communities. The measure is also a legitimate response to the constant aggressions, and abuses by the company against local governments, organizations, and community leaders who have opposed the mining project; including: death threats, physical aggressions, road blockades, and intents at invasion of land belonging to the Junín community.

The sinister land purchases by the company has been completely repudiated by our communities, and no government authority or institution has been able to put a stop to it.

We reject the company’s irresponsible version that says a clinic was destroyed, and the “communities are asking the company to rebuild it”. This is another lie. The truth is that what was destroyed was the Ascendant mining camp where their employees frequently met to plan aggressions and intimidations against our communities. Presently, a real clinic is being built in Chalguayacu Bajo with state funds, as it should be. The communities next to the mining site, including La Armenia, Junín, Cerro Pelado, Barcelona, El Triunfo and Chalguayacu Bajo, have not asked the company to do anything except leave the Intag area once and for all.

No one besides the group of people present is responsible for Saturday’s action. We emphatically reject the absurd accusation that certain leaders of the DECOIN organization were responsible.

We demand that: 1) The company immediately abandon our lands; 2) that it stops funding the false organization CODEGAM; 3) that it stops purchasing lands in Intag; and 4) that it bring to an end the persecution of community leaders and organizations.

We take the opportunity to denounce to the press that the Ascendant Copper Corporation mining company will soon present its Environmental Impact Statement to the Ministry of Energy and Mines for its mining project, but that it has never gone into the mining area to undertake the studies, as the law calls for. Every time the company has tried to go into the area, it’s been stopped. Our communities have never been consulted, and we insist that all the institutions of the State respect our constitutional rights, but specially the right to live in a healthy environment free of contamination; to be consulted, and of choosing the place of residence.

WE DO NOT WANT MINING

PRESS COMMITTEE; CONSEJO DE DESARROLLO COMUNITARIO (Community Development Council)

This past Saturday, December 10th, three hundred people from 12 communities in Intag gathered in Chalguayacu Bajo, less than four kilometers from the community of Junin and the mining concession owned by Ascendant Copper.  For more than 8 months Ascendant had been operating what it called an “experimental development” farm called La Florida in Chalguayacu Bajo.  After voting unanimously to take action, the assembly occupied the farm.  Once Ascendant’s local caretakers had removed their belongings, Ascendant’s facility was set ablaze.

The burning made national news in Ecuador on Monday and international news on Wednesday.  Newspapers in Canada – Globe & Mail, Ottawa Citizen, London Times, and CBC Business news – relied mostly on a news release by Ascendant and included a few quotes from Carlos Zorrilla.  Ascendant CEO Gary Davis felt “outraged,” claiming that the burning involved only 70 people, “a very small percentage of the local population.”  While Carlos countered that some 300 people were involved, only La Hora newspaper out of the Imbabura Province in Ecuador cited the official police report which stated that 300 people were indeed present and that no one was hurt.

I was not all that surprised when I learned of the burning on Saturday evening.  During the two months I spent in Junin this fall as an international observer, I frequently passed the Ascendant farm on my way into and out of Junin, most of the time with people from the community.  As time when on I began to see the farm more as they did – a daily reminder of Ascendant’s hypocrisy, contempt, and violence.  When Ascendant first mentioned the farm at a large meeting in the summer of 2004, they touted it as the centerpiece of a local development plan based on sustainable agriculture, sounding more like a development organization than a mining company.  Throughout the year Ascendant used images of La Florida on its webpage and in its prospectus to the Toronto Stock Exchange to show how much the company cared about local development and local needs.  In and around Junin, however, the only thing people experienced were unauthorized incursions into community lands, divisions between families and communities, assaults and death threats against local leaders, and the increasing likelihood of a large-scale violent confrontation.

In the summer of 2005 Ascendant began buying land at inflated prices in, near, and far from Junin.  Even as the company proclaimed to potential investors that it aimed to depopulate the region through these land purchases, it still maintained images of the farm as if the long-term interests of the region’s people and environment were its primary interest.  In the same way that George Bush used language of “healthy forests” for a program designed to clear cut national forests, Ascendant was not accountable to the contradictions between its practice and discourse.  As much as it was a material assault on the day to day lives of Intag’s residents, La Florida symbolized the disdain through which the company operated.  And as much as it was a material response, the burning of La Florida is also symbolic.  It is a direct statement to Ascendant, the Toronto Stock Exchange, the Ecuadorian government, and Ascendant’s investors that local people have the authority and power to say no.

DECOIN has been asked by the communities surrounding Ascendant Copper Corporation’s Junín mining project to inform the general public of the risks and dangers of supporting this company’s mining project. Ascendant Copper’s Prospectus has innumerable instances of misinformation and omissions that you should be aware of in case you are considering investing in this very troublesome project and company.  Below are the nine of the most substantial reasons it is a very bad idea to invest in this company and project.

1.  Local Opposition.  The prospectus gives a misleading idea that the opposition to the mine is centered on the grass-roots environmental organization, DECOIN, and in a few ‘individuals’ of a few communities.  This is completely false.  The majority of community presidents from communities surrounding the mining project, including:  JUNÍN, CERRO PELADO, BARCELONA, EL TRIUNFO, CHALGUAYACU BAJO, LA ARMENIA, CHONTAL BAJO, CUARAVÍ, VILLAFLORA AND MANY OTHERS, have signed official documents attesting to their community’s opposition to mining.  The above-mentioned communities are the most likely to be impacted by the project, and at least four of them face relocation if the project goes ahead.  Many more communities oppose mining in Intag, and the Prospectus is misleading you if it gives the impression most communities are in favor of the mining project.  JPG images of the original of these, and other documents were sent to the British Securities Commission to inform it and other commissions of some of the real risks facing this project and can be accessed at Mining Watch Canada, and DECOIN’s web sites. It is definitely not a matter of a few individuals, but of the majority of the communities and organizations that work in the region.

The outrage felt by the local population that led to the burning down of Mitsubishi’s mining camp in 1997, resulting in Mitsubishi abandoning the project, and in which over 200 people from seven communities participated, has been revived by Ascendant’s presence.  The local opposition has been so fierce and determined that the company has been unable to access the mining site to carry out the required environmental impacts studies for exploration.  Every single time they’ve tried to access their concessions, they’ve been stopped by the communities and forced to leave.

In addition to community opposition, the overwhelming majority of organizations working in Cotacachi County (site of the Junín project), and Intag in particular, are opposed to the project.  This includes the powerful Rio Intag Coffee Growers Association (AACRI); the Women’s Coordinating Committee (which represents eight women’s groups); The Agroecological Group, and the Intag Youth Organization, to mention just a few of the organizations openly hostile to mining development in Intag.

2. Government Opposition.  The Prospectus makes very little mention of the radical opposition to the Junín mining project by the Municipal government of Cotacachi.  The authorization of the Municipality is required for mining to go ahead, and the government has categorically stated that it will not give it.  The last time this was manifested to the British Columbia Securities Commission was on a letter by the Mayor dated September 2005 to the Commission.  In this same communication the Mayor said that they will use any legal means at their disposal to oppose the project (the letter can be seen at:  www.miningwatchcanada.org and www.decoin.org).  Indeed, in the past the government has presented two legal challenges to the project (see below).

3.  Exaggerated Claims.  Ascendant would have you believe their concessions in Junín contain much more copper than what the Japanese found after actually exploring the site for five years.  Mitsubishi was only able to discover a total of the equivalent of 2.26 million tons of copper. Ascendant is claiming they have 3 times this much.  Not only has Ascendant never explored the site, but after 18 months of their presence in the Intag area, they have been unable to even access the main mining site to do their environmental impact studies before exploration can begin, due to community opposition.

4.  Relocation of Communities. When the Japanese Metals and Minerals Agency carried out their Environmental Impact Assessment, based on only a fraction of the copper they eventually found, they predicted that four communities would have to be relocated.  As you can imagine, it will not be easy to legally uproot four communities and hundreds of families from their land and homes.  The real number of communities to be uprooted, taking into consideration later discoveries of copper, is more likely to be seven.  These communities now have ample support from local governments, communities and several indigenous groups in the area. And they have no intention of moving out.

5.  Ecological Ordinance.  In 2000, Cotacachi declared itself an ecological County.  The declaration came with a carefully crafted local government law prohibiting environmentally destructive activities, such as mining.  The government of the County of Cotacachi, led by the indigenous Mayor, Auki Tituaña, has publicly be known again and again, that it is determined to apply this local law to protect the County’s natural resources and its peoples. Photographs of original letters from the Mayor can be seen at:  www.miningwatchcanada.com

6. Uncertainties of Land Tenure and of the Mining Concessions.  As explained below in “Legal Challenges”, the different legal challenges to the legitimacy of Ascendant Copper’s mining concessions are ongoing and yet to be resolved.  The information on the Prospectus is especially misleading in this area. The company should not be claiming they have free and legal tenure of the concession until the final sentence from the different investigations and court action are handed down. Even some of their recently purchased properties are highly suspect. As a consequence of several denunciations of illegal and irregular land title transfers in Ascendant’s favor, Ecuador’s Institute for Agricultural Development (INDA), in October 2005, decided to investigate some of the titles in the hands of individuals who were selling their lands to the company.  So far, one criminal lawsuit has come out of the preliminary investigations for falsification of an INDA official’s signature. Many more are expected to follow.

Ecuador’s Congress and Ascendant Copper Corporation.  Furthermore, the Ecuadorian Congress’ Civic Anti-Corruption Commission, in May of 2005, officially instigate a complete investigation into possible corrupt practices surrounding mining activities and projects in the Intag area. This would include looking into the highly irregular concession processes.  If the Commission uncovers any corrupt practices linked to Ascendant Copper’s obtaining any of the numerous authorizations and legal permits required by national legislation, the mining project will come to an end.

7. Ecological and Archeological Considerations.  The Junín mining site sits amidst primary cloud forest belonging to two of the world’s most biological diverse regions on the planet: the Tropical Andes, and the Choco-Darien Western Ecuadorian Biological Hotspots.  Of the world’s 34 Hotspots, these are the biologically the hottest.  Additionally, Intag’s remaining forests are part of some of the last remaining native forests of northwestern Ecuador.  The area is known for its extreme biological diversity and its high rates of endemism.  The primary forests of Junín harbor dozens of mammal and bird species in danger of extinction; including Jaguars, Spectacled Bears, two species of monkeys, and the spectacular Plate-billed Mountain Toucan; these endangered mammal and bird species, along with many more, were listed on the 1996 Environmental Impact Statement done by two highly respected Japanese institutions.

The company, in its prospectus, states that it will not mine in primary forests.  Yet, the prestigious organization Jatun Sacha recently concluded a field study confirming that the site is covered in 63% primary forests.  Only 11% of where the bulk of the copper was found has been converted to agricultural lands; the rest is primary (63%), and secondary native forests.  And, more recently, Birdlife International, recognized the site around the mine as an Important Bird Area (Important Bird Areas of South America. Birdlife International, 2005).

The Japanese study, furthermore, predicted the mining project would also impact the Cotacachi-Cayapas Ecological Reserve (similar to a Wilderness Area).  This protected area is, arguably, one of the most biodiverse in the world. In Ecuador, mining is illegal in all protected areas.

Besides its ecological and biological diversity uniqueness, the whole area of the mining site is dotted with archeological sites from the pre-Incan Imbaya civilization.  The information in the Prospectus would have you believe that the archeological sites discovered and reported by the Japanese study are far away from mining site.  Again, this is highly misleading. The Japanese discovered several sites close to the community of Junín (as reported on page 114 of the study), as well as others close to the Intag river.  In actual fact, there are thousands of burial sites spread out throughout Ascendant’s Golden 1 and Golden 2 mining concessions- including an eroded earthen sacrificial pyramid close to the village of Chalguayacu Alto; well within the concessions.

In Ecuador, as even the Prospectus points out, mining is prohibited in archeological areas.

Heavy Metal Contamination
As for water resources, the area’s primary forests protect dozens of pristine rivers and streams.  The underground water resources are also unbelievably abundant, which will create tremendous troubles for the operation of any open-pit mine, as well as uncontrollable ecological impacts.  The EIA also predicted our rivers and streams would be contaminated with a deadly mix of heavy metals up to 10,000% higher than natural levels, including: lead, arsenic, cadmium and chromium.

For a complete list of endangered fauna and details of other social and environmental impacts please contact us at:  decoin@hoy.net

8.  Political Instability.  Ecuador is one of South America’s politically most unstable nations.  During the past eight years, 3 presidents have been violently thrown out of office by the country’s citizens.  The current President, Alfredo Palacio, has publicly said that his government will end the unfair profit sharing agreements with Petroleum companies. This is a sentiment widely felt in this, and other Andean nations, including Bolivia.  Taking into account that the 2000 mining law did away with the 3% royalty that mining companies had to pay the state, there are many civil society groups also calling for a complete re-writing of the mining law to benefit Ecuador, at the same time that many others are insisting all mineral and hydrocarbon resources be nationalized.

The instability is further engendered by Mr. Palacio’s call for a complete overhaul of the country’s constitution.  For this drastic step he has, on numerous occasions, called for a Constitutional Assembly made up of civil society representatives.  Many groups previously excluded from power will be relying on the Constitutional Assembly to re-write Ecuador’s Constitution so that more of the benefits from the exploitation of its resources stay in Ecuador.  In the next 60 days, it is hoped that a Popular Referendum will take place to make it legally possible for the Assembly to take place (source: various articles at:  www.elcomercio.com

9.  Present and Future Legal Challenges.  In 2003, the Municipal government of Cotacachi presented a Constitutional Injunction challenging the legality of Ascendant’s mining concession. The Municipal government won in both of the lower courts. Because the Tribunal has been inoperative since shortly before its final ruling rejecting the injunction on technical reasons, it has not been able to answer to a legal petition from the Municipality’s lawyer asking for a clarification of the case.

In May of 2005, the Municipality again presented another legal challenge at a different court to annul the concessions.  The main argument in both cases was that the government violated the constitution by not carrying out a proper consultation process with the communities, as Ecuador’s constitution requires.  Without this consultation process, mining not only cannot take place, but it makes the mining concessions themselves illegal.

OECD Claim. Working together with Friends of Earth Canada and Mining Watch Canada, in 2005 DECOIN presented a claim to the Organization of Economic Cooperation and Development against Ascendant.  We are claiming Ascendant violated safeguards contained in the Guidelines for International Enterprises.  As of 1 November 2005, the case is still pending.

The Interamerican Human Rights Court.  If the communities opposing the mining project cannot obtain justice in Ecuador, they will take their case to the Interamerican legal system; of which Ecuador is a signatory.  This could tie up the mining project for years as the court decides if the Ecuadorian government violated the communities’ human rights.  If the court decides in favor of the communities, the government is legally and politically bound to follow the court’s recommendations.

The international law firm, HellerErhman, represents DECOIN in the US and has submitted a number of documents pointing out some of the discrepancies and troubling aspects of this project and Ascendant Copper Corporation to the British Columbia Securities Commission.  It is unfortunate the officials in Vancouver and Toronto decided to not take more seriously their observations.  HellerErhman will continue working with DECOIN in order to assure our, and the community’s rights are respected and this project does not go forth.

What it comes down to is this: why would you want to support a project that that threatens to destroy primary forests and endangered species, people’s livelihoods, their homes and communities, their rivers and streams, and their basic human rights, knowing that it is a project that is overwhelming opposed by majority of the communities, the local government and in general, the society of Cotacachi?  Economically it is a very risky investment; ethically it is completely unacceptable.

ABOUT DECOIN.  DECOIN is a grass-roots environmental organization working to protect the Intag area’s unique and threatened biological diversity and other natural resources, and promotes sustainable development.  The local government of Cotacachi, in 2004, publicly recognized DECOIN’s work in protecting community water resources, the area’s forests and biological diversity, and for promoting sustainable development projects.  We are responsible for the creation of several economic and ecologically sustainable alternatives to mining, including a shade-grown coffee project (now over 250 member strong) and the community-run ecological tourism project in Junín.  DECOIN has created 32 community owned and administered watershed and forest reserve, including the nearly 4,000 hectare (10,000 acres) reserve managed by the community of Junín.  This is the natural reserve sitting on top of the copper Mitsubishi discovered in the 1990’s and which Ascendant dreams of exploiting.  It also happens to be the same area that is used by the community of Junín for their ecological tourism project.

For more details, please go to our website:  www.decoin.org, or contact us at:  decoin@hoy.net

July 10, 2005

I understand that Ascendant Exploration has presented a preliminary prospectus as an early step in the process of being listed on a Canadian exchange.  I write to share information and express concern about this company.  I am an associate professor of Latin American history at DePauw University.  In addition to teaching history courses, I also teach in the university’s management program, and I chaired DePauw’s conflict studies program between 1999 and 2001.  Prior to being an academic, I worked in international ocean freight, as line manager in Chicago for Christian Canadian African Line, an ocean carrier serving Canada and South Africa.  I had this job during the 1980s, the highpoint of the international sanctions against the apartheid government, an experience that made me keen to the issues of corporate transparency, conduct, and ethics.  I learned first hand the many ways companies have for making things seem to be what they are not.  I fear that such is the case with Ascendant’s efforts to be listed on Canadian markets.

I have conducted research in Ecuador since 2000.  During this time, I have meet frequently with Ecuadorian government officials, human rights organizations, the American Chamber of Commerce, and the United States Embassy.  Since 2000, I have spent considerable time in Intag region, have interviewed many people, and have analyzed the dynamics around the mining controversy.  Among the communities I have spent time with is Junín.  This past June, I spent three weeks living in the community.  While I seldom claim to be an expert, I do feel confident that I know plenty about what is happening in Intag region.

It is my conviction that for a capitalist market system to provide benefits to investors and society transparency in corporate organization and conduct is essential.  If we have learned anything from tragedies like Enron, it is that we must use highest criteria when evaluating claims of companies seeking capital from the general public.  I think extra caution is merited when a company like Ascendant has multiple names, subsidiaries, divisions, and other twists to corporate structure.  I have now lost track of the number of reorganizations undertaken by Ascendant, the number of companies they have within the company, and exactly who is in charge for what has happened and what may happen in Ecuador.  Is Chris Warren, for example, the top executive officer?  If so, does the fact of his past foul history with the United States Security Exchange Commission have any bearing upon evaluating investor risk?  Should the investing public be warned that people like Mr. Warren are involved with Ascendant?  Transparency, key for investor confidence, means answering some basic questions.  How much money, for example, has Ascendant spent so far in Intag region, and what are the real results of their spending?  How much infrastructure is in place, and what are the real costs for building the needed infrastructure?  Has anyone done an independent audit of Ascendants books, especially for money spent on programs like CODIGMEGA?  Why is a former Ecuadorian general in charge of community relations?

Transparency is tightly connected to the serious problem of corruption in Ecuador.  When I meet with businessmen from the American Chamber of Commerce, the number one item they focus on when discussing the business climate in Ecuador is corruption.  Their concern is for good reason, as Ecuador consistently ranks as one of the world’s most corrupt countries.  Obviously, transparency and corruption undermine investor confidence, and in this particular case, they make Ascendant a very, very risky proposition.  In evaluating their prospectus, I want to know what safeguards they taken to prevent corruption from perverting their company, especially among the people they have hired on the local level?  I think this question is especially relevant considering the company’s close relationship with General Villacis as well as ex-congressman Andrade.  Investors need to know exactly who these individuals are, why they are on Ascendant’s payroll, as well as the high risks Ascendant has undertaken by using them as front men on the local level.  In my view, Villacis and Andrade are draining Ascendant of money, pocketing capital that the company thinks it is spending on community projects and infrastructure development.  I think it is highly probable that both men have engaged and may be engaging in illegal activities, such as arms trafficking and narcotics trafficking.

I find it very interesting that Ascendant is widely known in Intag to be campaigning against the mayor of the canton of Cotacatchi, Auki Titiuani, who is widely recognized as one of the most honest politicians in Latin America.  He won an international prize for honesty in government.  A company divorced from corruption would welcome the opportunity to work with such a high profile example of a good politician in Latin America.  Instead, Ascendant seeks to have Auki thrown from power.  Investors need to be aware of the political decisions Ascendant has made, who their partners are, and who they have determined to be enemies.  Siding against honest, clean, politicians and in favor of people widely known to be corrupt reveals the very poor judgment that characterizes Ascendant’s business style in Ecuador, and constitutes a serious investor risk.

People who have spent considerable time in Intag, and know the communities well, think that Ascendant does not know what is happening on the ground.  I think the North American management has no sense of the local reality.  It is very clear that the North American management has spent very little time in Intag.  They overly depended upon Ecuadorians for information, and have little means for evaluating what they are told.  Concerned about the mess they have created in Intag, Gary Davis, President of Ascendant Copper, recently traveled to Intag region.  He met with people who favored mining, folks who were brought to the town of Garcia Moreno for the meeting.  To get the anti-mining side of the story he only met with one individual, Polivio Perez, who is perceived by Ascendant to be the leader of the anti-mining movement.  When Davis requested the meeting, Perez agreed, but only on condition that all the presidents from affected communities be present so they would hear what was said, and  have the opportunity to represent their communities.  Davis, however, declined those terms.  Instead, he showed up at Perez’ house, unannounced and after having cancelled the original meeting.  Fortunately, a British film crew was at Perez’ house, and the meeting was tapped (Davis is on record stating that if Junín does not want mining, Ascendant will leave).  It is unclear to me how Ascendant can represent the communities in Intag as favoring mining if their own president is unwilling to meet with the presidents of the communities?  It is also unclear to me how the North American management can have any correct estimation of local dynamics without such meetings.

I have studied the communities in Intag region longer than Ascendant has been in the area.  Anyone who knows the communities that will be directly affected by the open pit mine, can tell you that there is stiff, organized, and determined resistance to Ascendant’s plans.  In fact, there is a long history of resisting World Bank plans for mining in the area, as well as Bishi Metals efforts at building the mine in the 1990s.  This effort ended with the burning of Bishi Metals’ mining camp in May of 1997.  That victory is part of the local identity, the narrative that defines who people are in places like Junín.  These people are very clear in their opposition to mining.  The clarity is expressed in what may be the most often spoken response to what people think about mining:  “over my dead body.”  In reading Ascendant’s prospectus, I did not see that popular sentiment quoted.  It should be on the front page, in big bold letters.  This absence means one of two things:  either Ascendant does not know the history and extent of resistance in the region (in which case, hiring General Villacis as head of community relations is very hard to explain), or they are not truthful about the extent and nature of resistance.  In either case, the investing public has legitimate concern about the competence and transparency of Ascendant.

The company, I fear, is well aware of the vigorous resistance to mining in Intag region.  It is the one local dynamic they do understand.  While the rough physical terrain, torrent rainy seasons, and lack of infrastructure, far outpace Ascendant’s ability to develop such a large mine, the biggest obstacle to their ability to deliver is community resistance.  Ascendant knows this fact, and has been very aggressive with their efforts at eliminating community opposition.  Their main strategy is focused on demonizing DECOIN, attacking good, honest people who do not want the mine on their property, or suing the local newspaper, Periodico Intag, for libel.  Their tactics include disrupting community meetings, destroying minga (collective community work projects that are core to how rural communities in the Andean region function) projects, arming their employees (especially at the “experimental farm”), and direct forms of intimidation, including death threats.

Potential investors need to know who Mr. Carlos Alonso is.  He lives in Garcia Moreno, the pro mining stronghold showcased by Ascendant as example of community support.  Alonso walks around with two pistolas tucked into his pants.  In the United States, he is what we call a “good ol’ boy,” a person who can be your best buddy or meanest enemy.  Alonso is the local “rain man,” the fixer put in place by people like Villacis and Andrade, who dispenses cash to locals as means of buying them off.  He organizes trucks to drive people to pro-mining meetings, liquors them up on the way there, and feeds them a meal.  He’s especially known for organizing cock-fights, where people get plenty drunk and here lots of promises about what the mine will do for them.  Often they are asked to sign blank pieces of paper, which are latter used as evidence of local support for mining.  How does the Ascendant prospectus account for this way of doing business?  Are such practices the wisest means for winning over a community, especially for a project that has a long and controversial history?  Transparency means Canadian investors need to be introduced to Ascendant’s “Good ol Boys.” Perhaps a photo of Mr. Alonso at one of his cock fights with a band of drunk locals signing Ascendant papers should be included in the prospectus as evidence of their community development program?

I understand that in the recent past there have been legal challenges against the method that Ascendant has acquired its concessions.  I think investors have the right to know the full history of how concessions were acquired, and the history of the many legal challenges.  Do we know if any of these legal challenges are still active?  Are any cases still in court?  Will questionable land titles withstand the guaranteed onslaught of legal challenges that will be filled by Ecuadorian non-governmental organizations?  Or, are potential investors expected to be so naive about land titles in Latin America that they will gobble-up Ascendant’s representation of their property holdings?

Investors also need to know that Ecuador’s current political climate has left the court system dysfunctional (assuming it is even functioning at all).  I do know that there is an immense backlog of cases, and that prospects of continued political instability in Ecuador leave the legal status of Ascendant concessions very much open to question.  Transparency on the company’s part demands full recognition of this political reality.  Likewise, investors need to know that the proposed mine will border or be very close to the Cotacatchi-Cayapas National Preserve, a federally protected wildlife area.  I understand that there is an ecological buffer zone that protects the preserve, and the proposed mine would conflict with that buffer zone.  Given the fickle nature of Ecuadorian politics, it is not entirely impossible that an ecologically minded government might change many of the rules, regulations, practices, and enforcements that could have a direct and negative impact on Ascendant’s plans.  Likewise, Cotacatchi county is a mining free county.  To accomplish its project, Ascendant would have to circumvent or openly violate this county ordinance, a practice that could complicate the company’s legal standing in Ecuador and cause delays, added expense, and possible failure to their project.  Perhaps this ordinance is why Ascendant works to displace Auki Tituani as mayor, as well as why Ascendant is behind an effort to form a new county outside the control of Cotacatchi?  Is the effort by a Canadian company to form a new political jurisdiction in another country legal?

When I walk the dirt roads and mountain trails that link the communities that would be destroyed by Ascendant’s mine, I am always baffled about how this company (or any company) will build an open-pit copper mine in Intag.  As I contemplate the scope and scale of the undertaking, I falter at imagining how Ascendant will do it.  They do not have the capital for such an undertaking, nor do I think they have the competence.  Investors need to know a fair estimate of how much money the project will take, and that estimate needs to be measured against two things.  First it needs to be measured against the costs of existing mines in similar places.  Do the cost estimates of Ascendant match the real costs of existing mines?  Second, it needs to be measured against what Ascendant has already spent and what it has so far accomplished.  Lack of transparency thus far makes it nearly impossible to evaluate the company, but I think it fairly certain that the company is bleeding money on the local level.  I think they are in it so deep and are so blind to the local realities, especially about the people they poorly selected to do the ground work, that no rational person should invest money in them.  Even if they raise capital on Canadian markets, I see no way possible that Ascendant will build this mine.  It will take a major mining corporation to pull this off, a Rio Tinto Zinc, for example.  If half the fantasies I read in the prospectus are true, the smart investor will have to ask why a company like Rio Tinto Zinc has allowed this opportunity to pass them by?  Why is such a minor actor the only company to pursue this copper mine since the Bishi Metals fiasco?  What do companies like Rio Tinto Zinco know that Ascendant clearly does not want the investing public to know?

As an historian, I attempt to avoid predicting the future.  In this case, however, I am confident that the people Ascendant has hired in Ecuador will laugh all the way to the bank if the company is traded on Canadian exchanges.  People like Villacis, Andrade, and Alonso playing Ascendant brilliantly, and they will rob Canadian investors blind.  Ultimately, for them, it does not even matter if the mine ever gets built, because they will get rich from the effort.  When Canadian investors catch-up to such a sad reality, there will be no mechanism for accountability.  Holding a phd in Latin American history, I can tell you straight-up that through the decades this scenario has been played out many times over.

If you have questions or want further information, I should be pleased to respond to them.

Sincerley,

Glen David Kuecker, phd
Associate Professor of Latin American History
Department of History
Greencastle, Indian 46135
gkuecker@depauw.edu

Ps.  Please extend the courtesy of confirming receipt of this letter.  I am best contacted by email.