TORONTO (miningweekly.com) – Latin America-focused gold junior Minera IRL, which is developing the Ollachea gold project, in Peru, has run into a road block as the local community has suspended its support for the project.

The triple-listed company stated on Monday that the Ollachea community had raised concerns about the status of the company's plans to reorganise its management structure and the specific role of certain individuals within the company.

Minera had responded directly to community representative Senor Valeriano, reiterating its commitment to the community moving forward and ensured that the company would honour all its previous commitments.

The company would endeavour to work with the Ollachea community to address the other concerns being raised. There was a general meeting of the community on Saturday and Sunday, where this matter was under discussion internally. Minera was awaiting the outcome of this assembly.

The company stressed that until these community issues were resolved, it could not advance the project and, therefore, the expected August start-up of a 5 000 m exploration drill programme and the final negotiation of the engineering, procurement and construction management contract were put on hold.

This embargo increased the risk of completing the previously announced project financing, Minera said.

“We understand that the loss of Courtney Chamberlain and the transformation of the Ollachea project from exploration to a significant mine development project has created uncertainty with the community. I would like to emphasise my previous message that the company and board are committed to a long-lasting and positive relationship with the community as we move together as partners into the next phase,” executive chairperson Daryl Hodges advised.

 InIn April, Minera announced the passing of founding director Chamberlain.

The company felt it had developed a strong working relationship with the Ollachea community over the last eight years. This included having spent more than $100-million, to date, advancing the Ollachea gold project. This involved more than $25-million being spent in the Ollachea community and entering into a long-term agreement by offering the community a 5% carried interest in the company's subsidiary that held the gold project.

Minera advised that despite expecting to arrive at a favourable resolution of the current situation, the outcome of these discussions remained uncertain.