Ecuador has reached an agreement with Ecuacorriente, the local unit of Canada's Corriente Resources Inc., that allows the company to mine the Mirador copper project, Wilson Pastor, minister of nonrenewable natural resources, said Thursday.

At a press conference, Pastor said the contract between the Ecuadorean government and Ecuacorriente will be signed Monday at the presidential palace.

The agreement includes royalties of between 6% to 8%, depending on the price of copper.

Pastor said the company plans to invest about $1.4 billion over the next five years in the Mirador project, located in Zamora Chinchipe province in southern Ecuador.

Ecuacorriente will pay Ecuador's government $100 million in advance royalties to fund social projects in areas around the mine.

Ecuador expects the company begin production late in 2013.

Pastor said the negotiating process with Ecuacorriente has been very difficult, but the agreement "opens large-scale foreign mining investment in the country."

According to Pastor, the agreement allows the government's share of the project's economic benefits at a minimum 52%, including royalties and several taxes.

"With this project Ecuador will be the world leader in terms of how much revenue it will be obtaining," the minister said.

Ecuador's mining output currently is minimal. President Rafael Correa's administration plans to sign exploitation and investment contracts with at least three foreign mining companies this year.

The Correa administration is also negotiating with Kinross Gold Corp. (KGC, K.T) for its Fruta del Norte project and with the local unit of International Minerals Corp. (IMZLF, IMZ.T) for its Rio Blanco project.

Pastor has said that a final contract to allow Kinross to mine the Fruta del Norte deposit might not go through because the company wants to renegotiate the terms of an agreement signed with the Andean country in December.

The main disagreements with Kinross are over base prices for the windfall profit tax that the company should pay, and related issues.

On Thursday Pastor said that talks between the administration and the company continue.

Pastor is scheduled to meet this month with Kinross Chief Executive Tye Burt.

-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com

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