Sept/Oct 2010

Spotlight on Peru

Free trade pact, expanding infrastructure spur exploration

By Jeff Borsato


On the lookout for opportunities in Peru | Photo courtesy of Andean American Mining Corp.

As the world’s second largest silver and fifth largest gold producer, Peru is at the forefront of an increasing interest in mining opportunities in Latin America. That was the message from a host of Latin American-focused mining companies and industry specialists at On the Ground Group’s “mineSouthAmerica” seminar held recently in Toronto. The seminar focused on mining and investment opportunities in Peru, highlighting current and future developments in the mining and energy industries in the country where, in 2008, mining and mineral exploration activity contributed about seven per cent to GDP.

The keynote address, given by Jose Zlatar, president of the Peruvian-Canadian Chamber of Commerce, highlighted the longstanding relationship between Canada and Peru and our $2.3 billion in bilateral trade in 2008. Noting the recent approval of a Canada-Peru Free Trade Agreement (CPFTA), Zlatar stressed how an FTA “would create a more stable environment for investors and protect them from discrimination and expropriation without fair compensation.”

An emerging economy of 28 million people, Peru is fast becoming a hot spot for foreign investors from the mining and electrical generation industries. Seminar chairman Brian Levett, a partner at Macleod Dixon LLC, spoke of the need to be on the ground in each locale. “[Macleod Dixon] has offices throughout Latin America because we need to be where our clients are in the board room and the project site,” he said.

Country risk and community engagement were often repeated themes during the half-day seminar. Keith Laskowski of Canadian Shield Resources focused on Peru’s advantages: “Being a politically stable state with good infrastructure and excellent access make Peru an attractive place to do business,” he said.

Patrick Burns, president of Condor Resources, provided an update on what he called “my ongoing search for bonanza grades in Peru” with photos and survey results from two of Condor’s six projects in the country. Focused exclusively on mineral exploration in South America, Burns stressed Condor’s ongoing efforts at community involvement and engagement as part of its work on over 720 square kilometres of land it is actively exploring. “Maintaining close ties with the community is critical for our future success in the region; we have several full-time staff dedicated to community relations at our Peruvian and Chilean project sites,” said Burns.

Andean American Mining CEO John Huguet pointed to Peru’s talented labour pool and community support as key features in development of their fully owned Invicta Project 250 kilometres northeast of Lima.

Stephen Mlot of Alto Cercapuquio S.A.C. noted Peru’s surging economy as part of his company’s hydroelectric generation projects in the region. “Peru is becoming an exporter of liquefied natural gas and developing a burgeoning petrochemical industry while working towards a national rural electrification plan.”

Strait Gold has three active projects in Peru. The company’s CEO, Jim Borland, described potential discoveries at their Alicia project, a copper, gold and silver package 60 kilometres south of Cusco.

There were nine presentations in total, seven updates from mining companies with Peruvian projects in development, and two presentations regarding financing mining projects in South America and dual listing on the TSX and BVL (Lima Stock Exchange), which, like the TSX Venture Exchange, is heavily weighted in mining and junior exploration companies.

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