Minera IRL aims for 2010 Ollachea prefeasibility

Thursday, November 19, 2009

Lima-based Minera IRL (AIM, Lima: MIRL) aims to complete a prefeasibility study by the end of 2010 at its Ollachea gold project in Peru, where a scoping study released this week outlined 117,000oz/y output for nine years.

"There is a lot of work to do to take it to the next stage, and we expect that will take about 12 months," IRL executive chairman Courtney Chamberlain told BNamericas.

"Once that is completed and we get a positive tick on that, then we go into the final feasibility study," he added.

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The company is expecting to spend US$8mn-10mn next year on infill drilling, detailed metallurgical and geotechnical studies, and other work that will go into the prefeasibility study.

Looking at the project "simplistically," a feasibility study could be complete by end-2011 with permitting and financing ready by mid-2012, such that construction could begin in 2H12 and production in 2014, Chamberlain said, adding that a planning meeting is scheduled for January to better define the timeline.

Investment in 2011 will roughly match that planned for next year.

The Ollachea scoping study calculated capital costs of US$157mn and was based on inferred resources from the Minapampa zone of 8.9Mt grading 4.5g/t gold, or 1.3Moz.

The Minapampa mineralization has been defined over 680m and remains open down dip and along strike, while IRL is also exploring outside the zone with results such as 45m grading 2.8g/t gold including 6m of 10g/t, said Chamberlain.

"I'm very happy to go into a new project with a plus 100,000oz/y producer for nine years... But I know in the back of my mind that we have the capacity to extend that mine life projection or maybe increase the tonnage a little bit between now and when we finish the feasibility study," he said.

"Certainly once we get into operation we still won't stop exploration."

IRL is earning 100% of Ollachea, in Puno region, through an option agreement with Rio Tinto (LSE: RIO). The company also has the producing 30,000oz/y Corihuarmi gold mine in Peru and is in the process of acquiring the Don Nicolás project in Argentina.