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Shares of Canadian mining companies with operations in Ecuador were pounded yesterday as an assembly that’s writing the country’s new constitution overwhelmingly approved a decree to revoke most mining concessions there.

Ninety-five members of the 130-member body voted for the measure, which also calls for creation of a state-run mining company.

The assembly is controlled by the party of leftist President Rafael Correa. When he took office last year, he vowed to increase state control of natural resources and the economy.

A number of large Canadian mining companies have concessions in the South American country and could be affected.

Shares of Aurelian Resources Inc., which holds the 950-square-kilometre Fruta del Norte discovery, fell $2.22, or more than 30 per cent, to $5.14. Dynasty Metals & Mining Inc. shares fell $2.11, or 34 per cent, to $4.05.

Shares of Corriente Resources Inc. fell 50 cents, or more than 10 per cent, to $4.10 before trading in the shares was halted pending the news from Ecuador.

"The company has requested an official version of this mining mandate and will advise further as to the impact of this mandate on the company’s operations in Ecuador when the company’s analysis is completed," Corriente said in a statement.

Corriente holds the Mirador copper-gold operation.

Miners and industry observers bemoaned the situation, calling the government’s move a blow to junior miners, particularly those such as Aurelian with a fat stable of concessions in the Andean country.

"It sends a message that this administration is not fully aware of what mining can do for their economy, and what modern mining is like," said Patrick Anderson, Aurelian’s chief executive.

The decree revokes hundreds of concessions and limits the amount any company can hold to three free credit report.com. Toronto-based Aurelian currently has 38 concessions in Ecuador.

Mining companies will not be allowed to appeal the government’s decision in courts and no compensation will be granted for expropriated holdings.

Alberto Acosta, head of the assembly that is rewriting Ecuador’s constitution, said recently he was concerned about the effects mining could have on the country’s pristine environment.

With files from Associated Press and Reuters News Agency

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