TORONTO (miningweekly.com) – Latin America-focused gold junior Minera IRL on Thursday said the Peruvian Mines and Energy Ministry (MEM) had approved the environmental- and social-impact assessment (ESIA) for the Ollachea gold project, paving the way for the company to start construction of the $177.5-million project.
Minera IRL submitted the ESIA for project to the MEM in December 2012, which was the result of more than three years of environmental baseline studies, the definitive feasibility study, archaeological studies, the water management plan, flora and fauna studies, social baseline studies and of comprehensive community public consultations.
Minera said the Ollachea community “overwhelmingly” endorsed the ESIA, which was supported by a 30-year surface rights agreement with the community.
With government approval of the ESIA, the company would now focus its efforts on obtaining the construction permit, which management expected to receive in the first quarter of 2014. In parallel with these permitting activities, the company said it would continue to advance project-financing negotiations, which were expected to be substantially complete toward the end of the year.
The company expected to start construction activities in 2014 and bring the mine into production in 2015.
Bear Creek Mining on Wednesday also secured environmental approvals for its Corani mine, in the same country.
Lima-based Minera discovered the Ollachea orogenic gold deposit, located in southern Peru, in late 2008 after acquiring the property from Rio Tinto in 2006. Since that time, the company had completed more than 81 000 m of diamond drilling in 208 holes, resulting in the delineation of significant mineral resources and reserves at Ollachea.
To date, drilling had defined a National Instrument 43-101-compliant indicated resource of 10.6-million tonnes grading 4 g/t gold for 1.4-million ounces at a 2 g/t cutoff, as well as inferred resources totalling 13.7-million tonnes grading 2.9 g/t gold containing 1.2-million ounces of gold at the same cutoff.
A feasibility study was completed and announced to the market by the end of 2012. The study provides a more detailed confirmation of an economically robust project with production of more than 920 000 oz. The average cash operating cost is expected to be $499/oz.
The after-tax net present value, using a base case gold price of $1 300/oz and a 7% discount rate, was $155-million, with an after-tax internal rate of return of 22%. The payback period is less than four years.
Last month, the company secured financing for its Don Nicolas project, in Argentina.