San José, Costa Rica, since 1956

Op-ed: 'Zombie' Canadian mining company, Infinito Gold, stalks Costa Rica

Most of us are familiar with zombies featured in scary B movies, otherwise known as the living dead. Now a recent study by Tony Simon, co-founder of the Canadian entity Venture Capital Markets Association, has found that there are some 588 junior resource firms with negative working capital (more dead than alive) listed on the Toronto Stock Exchange Venture Exchange (TSXV).

These include Infinito Gold, the Calgary-based mining company that is still fighting over its defunct open-pit gold mine project in Costa Rica.

This appears to be contrary to the Venture Exchange’s continued listing requirements, which stipulate that firms have to be able to show at least 50,000 Canadian dollars ($41,000) in working capital (more alive than dead). Mr. Simon uses the term “zombie company” for corporations bleeding red ink and suggests that the TSXV follow its own rules and de-list them right away (and protect the small investor).

Mr. Simon has Infinito Gold sitting at #587 on his “zombie” list — sporting the second greatest negative working capital, a whopping negative $127 million.

With no functioning mines to draw capital from, and its own CFO cautioning trouble if any of the long overdue loans are called in, Infinito Gold should be six feet under, except for a major shareholder who from behind the scenes keeps loaning money to keep the firm on life support.

Some 15 years ago Infinito Gold bought previously prospected land in northern Costa Rica (Las Crucitas) thinking to establish an open-pit gold mine. But from the get-go the company chose to ignore the many signs that this Central American nation sees itself as an eco-friendly destination, wishing to avoid the damage that mining can unleash on pristine rivers and forests.

For Infinito Gold a “No” from Costa Rica has never meant “No.” This despite the fact that polls have shown that 80 percent of Costa Ricans oppose the mine, a statistic backed by large street demonstrations.

A single-minded Infinito has lumbered on over the years employing a battery of local lawyers to unsuccessfully challenge Supreme Court decisions ordering (and then re-confirming) the mine’s closure, while simultaneously trying to intimidate Costa Rican academics and environmentalists by suing those who dared to speak out (Infinito lost all six of these court cases).

You might think that after scoring zero in the country’s domestic court system, Infinito would have called it quits. Not so! The company’s main backer has sought to up the ante by bankrolling this shell of a company to try and land a $94 million mega-award against Costa Rica via a private, investor-friendly, World Bank tribunal, the International Centre for Settlement of Investment Disputes (ICSID).

Canada has felt the fiscal pain of being the biggest loser of international investor challenges to domestic public policy under the 20-year-old North American Free Trade Agreement (NAFTA). But apparently no lessons have been learned here as the country is now providing cover for this ICSID challenge by a zombie Canadian firm determined to make Costa Rica pay for the courage shown by its judges in upholding the country’s environmental legislation.

Rick Arnold is a retired Canadian social activist who has lived and worked in Costa Rica.

Editor’s note: The Tico Times sought a response from Infinito Gold to this opinion piece. Calls made to the company’s Costa Rica office and to its Canadian headquarters were not returned, and emails were unanswered.  

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Maybe you have forgotten the TRUE facts or just ignored them. Abel pacheco’s administration decreed a moratorium on open pit mining but the Costa Rican constitutional supreme court (Sala 1V) ruled that any existing concession was exempt. Infinito fell into that category.
Anti mining groups then submitted amparo’s ( protection of constitutional rights) to the Constitutional Court with the intent of halting the project. The Constitutional supreme court , after a lengthy review and a site visit, dismissed all of their objections AND also ruled that President Oscar Arias’s decree, which stated that Las Crucitas “is in the national interest” was legal.
It was a lower court ( after a trial that lasted barely a week ) that overturned the constitutional supreme court’s ruling. That decision has effectively rendered any future ruling by The Constituional Supreme Court Of Costa Rica as ineffective / useleless. That is a disgrace.

Infinito’a subsequent appeal to the Sala 1 was denied and when the company appealed back to the Sala 1V regarding a ruling on why a “Lower court” could overturn a Supreme Court’s ruling, the Sala 1V refused to even hear the appeal. That’s why Costa Rica wil be assessed a heavy compensation penalty at the International centre for the settlement of investment disputes (ICSID).
The company’s “main backer”, as you put it, has provided additional funds for the legal process and I would venture to say that it is because of people like you who have made scandalous attacks on his character. You should be ashamed of yourself.
There is an old saying, “Be careful what you wish for, you just might get it”. The anti mining groups got what they wanted, Las Crucitas was stopped. The cost of that action will now be paid for by the Costa Rican people.
Costa Rica will have to borrow that money from the World Bank. The very same organization that administers the ICSID, how ironic. Don’t you agree?
Regarding your statement that 80% of Costa Ricans oppose the mine, RUBBISH !!!!!! That would mean 4 Milliom people opposed the mine. Only 1.7 Million people voted in the last run off election.
Here’s a thought for you. Present the people with the true facts of the case, tell them the jobs that were lost, the government revenue that was lost and the financial penalty that they will be required to pay. Tell them all this and then conduct a poll.

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Ken Morris

Well, it might be a zombie in large part because of Costa Rica jerking it around. If memory serves, then President Oscar Arias gave the firm a green light. Sure, it subsequently lost court cases (easy to do under Napoleonic law) and public opinion is against mining, but if you were a business and the president of a country said fine, what would you do?

I’m no fan of mining, and you can probably include me in the 80% that opposes it, but fair is fair. The way I read it, this company got a royal screw job by Costa Rica and will likely rightfully win damages, if the zombie funding the legal challenge doesn’t run out of money.

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