Solaris Resources (TSX:SLS)(NYSEAmerican:SLSR) on April 17, 2024 reached a significant milestone for its flagship Warintza Copper Project in southeastern Ecuador. The company signed an updated Impact and Benefits Agreement (IBA) with the Shuar communities of Warints and Yawi, reflecting the continued growth and advancement of the project and reaffirming the communities’ support for responsible development. Here’s what’s behind the agreement and why it is such a major milestone for the project and the country.

The updated IBA followed the Ecuadorian government’s publication of a manual demanding prior consultation with surrounding communities for existing and new mining projects. This agreement built upon the strategic alliance formed between Solaris and the Shuar communities in August 2019, which has fostered direct and transparent dialogue regarding all project-related activities.

The Warintza deposit, discovered by David Lowell in 2000, sat dormant for two decades due to a breakdown in social acceptance from local communities. In mid-2019, Solaris undertook extensive dialogue to understand and resolve the root causes of conflict, leading to the signing of initial impact and benefits agreements in 2020 and 2022.

Key highlights of the updated IBA include explicit community consent for the Warintza Project, legally binding and ensuring the communities are informed and engaged throughout the project’s lifecycle. The agreement also includes commitments and benefits to the communities, such as impact mitigation measures, local employment and training opportunities, education and skills training programs, investments in community infrastructure, and financial benefits and compensation for the use of ancestral lands.

The IBA is governed by an elected Board of Directors that operates as a regional task force, monitoring project activities, communicating with employees, and ensuring accountability of the commitments made between the State, Community, and Company.

Solaris president and CEO Daniel Earle stated, “The signing of this updated impact and benefits agreement marks a significant milestone in the social advancement of the Warintza project through our pioneering participatory mining model for sustainable resource development.”

The timeline of agreements between Solaris and the Shuar communities includes a Memorandum of Understanding signed in January 2019, the first Impact and Benefits Agreement in September 2020, an updated agreement in March 2020 for project advancement and scope expansion, and the completion of an Environmental Impact Assessment on the project in late 2022.

The updated IBA ultimately demonstrates Solaris Resources’ commitment to responsible and inclusive mining practices, ensuring that local communities are involved and benefit from the Warintza Copper Project’s advancement.

Ms. Sonsoles García, Minister of Production, Foreign Trade, Investment and Fisheries, commented, “We value this initiative of Solaris because it strengthens positive community relations and provides for the integration of the local population in productive and sustainable activities. This allows the inclusion of a traditionally displaced population, which is a priority for us. It is also aligned with the priority we have as a National Government of territorial development and good use and management of resources.”

Mr. Daniel Earle, President & CEO, commented, “The signing of this updated IBA builds on the foundation of good faith dialogue and trust that led to the formation of a Strategic Alliance partnership with our host communities and original IBA in 2020. This marks a significant milestone in the social advancement of the Warintza Project through our pioneering Participatory Mining model for sustainable resource development.”

Mr. Agustin Kayuk, leader of the Shuar Warints Center and member of the Board of Directors of the Strategic Alliance, commented, “The signing of this updated IBA strengthens the working relationship with Solaris and brings greater opportunities for the development of our communities. The decision is supported by a permanent relationship with the Company based on mutual respect and transparent dialogue, as well as a history of positive impacts generated for our people. We look forward to continuing our relationship and playing an integral role in the advancement of the Project.”

Mr. Vicente Froilan Juank, leader of the Shuar Yawi Center and also a member of the Board of Directors of the Strategic Alliance, commented, “The updated IBA brings further support and new opportunities for our people. When Warintza advances, our communities advance with it. Since the signing of the inaugural IBA in 2020, and with the help of the Ecuadorian state, the local impacts in job creation, community infrastructure, and development of programs in health, education, skills training, entrepreneurship, and innovation have been evident in our daily lives.”

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.