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Alex Black is COO and Director Rio Alto Mining Limited and lives in Lima, Peru.
The La Arena project is located 480 km north-northwest of Lima and is situated on the eastern slope of the Western Cordillera. La Arena lies within a multi-million ounce gold district that includes the Lagunas Norte mine (Barrick Gold Corporation) located at Alto-Chicama, the Comarsa mine (Compania Minera Aurifera Santa Rosa S.A.), the La Virgen mine (Compania Minera San Simon S.A.), the Shahuindo gold-silver exploration project (Sulliden Exploration Inc.) and the Tres Cruces gold exploration project (New Oroperu Resources Inc.).
Please see the First Phase Development Program web page at the Rio Alto Mining Limited site for more information on La Arena and Rio Alto Mining. Also please see the transcript from the Webcast, Thursday, May 28, 2009 detailing the merger of Mexican Silver Mines and Rio Alto Mining where, Feisal Somji, CEO of Mexican Silver Mining (now President, CEO and Director of Rio Alto Mining Limited) said:
our focus will initially be the development of the La Arena project in Peru looking for production within 18 months.
This interview was completed October 14, 2009.
GoldMinerPulse (GMP): Alex, thank-you very much for taking time from your busy schedule to answer questions about your La Arena project.
Alex Black (Alex): It's my pleasure.
GMP: And congratulations on completing your Environment Impact Assessment milestone this past September. Can you talk a bit about the process you went through to complete the report? Were there working meetings with the Peruvian Ministries involved?
Alex: The preparation for submission of the EIA took approximately 2 years. A pre-requisite to filing an EIA in Peru is that you hold community workshops involving both ministry and community groups.
GMP: Did the Ministries direct what had to be covered in the report or are the EIA reports prescribed by Peruvian regulations?
Alex: The preparation and filing of an EIA in Peru is a prescribed process and we followed that process. There is more information at www.gtci-camisea.com.pe and Ministerio de Energia y Minas.
GMP: Can you comment on the typical process the Peruvian Ministries follow in response to EIA report submissions?
Alex: The approval process takes on average between 6 and 9 months. We have budgetted for 9 months in our development plan.
GMP: What happens at La Arena during the 6 to 9 months approval timeframe?
Alex: Observations will be made by the ministry and we will need to answer those observations.
GMP: What is the status of the consultation process with the local communities?
Alex: Community consultation is an ongoing process and covered in the EIA. We are opening a site based community liason office on site in the next week or so whereby we will invite members of the community to speak with us, register for work etc.
GMP: Has your La Arena EIA report and related work received any coverage in the local/Peruvian media? Can you comment on local support for the project?
Alex: The response from the local press to our filing has been positive. Support for the project is positive.
GMP: Your August 5, 2009 News Release, La Arena Surface Rights and Project, indicated you had acquired 100% of the surface rights over the gold oxide resources and 72% of the rights required to build the Gold Oxide project. Can you provide an update or suggest a timeframe for when to expect further information on the surface rights? Are surface rights issues on your critical path to get to Q4 2010?
Alex: Our surface rights acquisition program is an ongoing process and one of the critical path items for production in Q4 2010. We don't envisage any issues in completing the acquisition of additional land.
GMP: In the May 28th Webcast you stated: We have Coffey Mining, who did our March 2008 43-101 mobilizing to Peru in the first week of June to work with us to put together a new 43-101 on these oxide reserves. Can you provide any update on the current status of the work on the new 43-101?
Alex: We are currently reviewing the status and timing of the preparation of a new oxide reserve. The public will be advised of our plans shortly.
GMP: Will the new 43-101 be a Feasibility Study? Or what kind of 43-101 report (e.g. Scoping Study) is expected?
Alex: The new 43-101 will predominantly focus on the gold oxide component of the project. It will be a part of the internal feasibility study of the gold oxide project.
GMP: To hold your Q4 2010 start of production milestone, which I know is very exciting for your investors, can you comment on what are the major critical path milestones you still have to complete to hold that date?
Alex: Production by Q4 2010 is definitely achievable and we are now 3.5 months into our 18 month development plan. The milestones are several and we are planning to post something in that regard on our website in the not too distant future.
GMP: Your September 21st press release mentioned Several exploration targets were revisited and prioritized for future work. Is future work in this case likely to be post Q4 2010 or can you comment on possible activities around these exploration targets in the months before Q4 2010?
Alex: At this stage, we have not planned any exploration at La Arena prior to Q4 2010. This may change and if it does, the public will be advised.
GMP: Can you comment on the water needs you'll have to solve to meet the Q4 2010 milestone?
Alex: Vector Peru is currently conduction hydrogeological work at La Arena to determine our water needs and from where we will be sourcing our water. There is abundant sources of water at La Arena but nothing has been publicly disclosed as to what our plans will be as yet.
GMP: In your May 2009 webcast, you mentioned: One of our plans here is to also get another listing on the Lima Stock Exchange in Peru. Can you provide any updates on the Lima listing plan?
Alex: At this stage listing of the company on the Lima Stock Exchange is on schedule for sometime in November.
GMP: Following-up on Lima: Can you call to mind any new gold/silver mining company listings on the Lima exchange? What is the "climate" like in Lima for gold/silver companies?
Alex: My understanding is that Rio Alto will be the first foreign junior company to list in Lima in approx 12 months. Of all the foreign junior companies listed in Lima we will be the only company at the development stage. The investment climate in Lima for our type of story is very positive and we should be well received in the market.
GMP: Do you know if the La Arena deposit is well known in the gold/copper mining community?
Alex: La arena is well known in Peru. The thing that is not well known is the copper potential of the project which is very large.
GMP: Have you had any interest from other companies about possible partnerships to help you develop La Arena?
Alex: Yes we have but I cannot be specific.
GMP: At what point in the La Arena project life cycle might a Yamana or another major gold/copper producer be interested in La Arena?
Alex: When La Arena is producing +100,000 oz Au per year and +50,000 tonnes of Cu a year, I think we will be very interesting to a lot of mid-tier metals producers.
GMP: Any final reflections on La Arena?
Alex: Let me tell you it was a lot of hard work and perseverance to hold on to the opportunity to acquire La Arena. With the world suffering its worst financial crisis for decades it wasn't easy but we did it. I have been involved with the acquisition of three other world class projects in the world being Boroo Gold Project (Centerra Gold) Salman Gold Project (Adamus Resources) and Marcona Copper Project (Chariot Resources) and let me tell you, La Arena is as good as any of them.
GMP: Thank-you very much for your time. I really appreciate this opportunity to learn more about La Arena from someone with on the ground experience with Peruvian mining.
Alex: My pleasure.
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