Ecuador has revoked the environmental license for DPM Metals’ Loma Larga gold project in Azuay, halting a development that had cleared a key approval only weeks earlier and igniting new uncertainty around one of the country’s most contested mines.
The Environment and Energy Ministry said technical reviews by local water authorities underpinned its decision, citing the need to protect the Quimsacocha reserve and public health.
The move follows large demonstrations in Cuenca and surrounding communities that pressed the government to scrap the permit.
Local leaders had warned that underground mining in the páramo, a fragile highland ecosystem that feeds municipal water supplies, could compromise the basin that sustains the region.
“The national government reaffirms its commitment to the rights of nature and the defense of water sources,” the ministry said in a statement.
DPM Metals, which trades in Toronto under the ticker DPM, acquired Loma Larga in 2021 through its purchase of INV Metals.
The company had told investors the project would require about $419 million in capital and could average roughly 200,000 ounces of gold annually in its first five years.
The government had already paused on-the-ground activities in August pending an environmental management plan, despite granting the license in late June.
The license reversal lands amid a fraught permitting backdrop in Ecuador, where only two large-scale mines are operating and several projects face legal and social challenges.
Loma Larga’s location near the Quimsacocha water reserve intensified scrutiny throughout the summer, culminating in marches that drew tens of thousands and a political pivot in Quito toward local control of the outcome.
DPM, formerly Dundee Precious Metals, completed a corporate name change on September 12 while continuing to trade under the same symbol.
The rebrand coincided with a broader portfolio shift following the company’s acquisition of Adriatic Metals this year.
DPM previously secured an investment protection agreement with Ecuador that provides tax stability and access to international arbitration, a framework miners often lean on when approvals unravel.
Those cross-currents are arriving as bullion strength keeps capital rotating toward mining exposure; earlier this month, Sprott launches an active metals and miners fund amid renewed interest in producers and developers.
On the base metals side, dealmaking such as the Teck and Anglo merger has sharpened attention on permitting pipelines and jurisdictional risk in the Americas, while policy ambitions captured in what Ottawa sees in copper underscore the supply urgency behind cleaner energy buildouts.
Loma Larga’s economics may still be compelling on paper, but the project cannot move forward without a durable social license and a reinstated permit.
