We acquired an option for the Ollachea project and began exploration fieldwork in 2008. The project is located in Peru‘s southern Puno district about 250 kilometers north of Lake Titicaca, on the eastern escarpment of the Andes Mountains.
Studies demonstrate the feasibility of a low-cost underground mining operation and we are advancing with engineering studies. A large reserve base has been delineated. On-going drilling has shown more promising results.
The project benefits from easy access via the new Interoceanic Highway. It has a guaranteed electricity source from the nearby San Gaban hydroelectric station. There is abundant water. The Peruvian government has approved the project‘s environmental impact study and permits for construction.
The project has the strong support from local communities, in both the direct and indirect areas of influence. The Ollachea mine project is expected to become an important source of employment in the area.
We also signed an unprecedented 30-year surface rights agreement in 2012 and as part of that long-term agreement, the Community of Ollachea will earn a 5% participating interest in the mine once it starts commercial production.
Importantly, Minera IRL has a mandate with Peruvian government bank COFIDE (Corporación Financiera de Desarrollo) to structure a syndicated senior loan for $240 million, with a $70 million syndicated loans already dispersed
Geologically, Ollachea is an orogenic-style gold system. These types of gold systems are known for their large size and continuation to depth, and therefore, are a major source of the world’s gold production.
The Ollachea gold deposit is hosted in Devonian-aged carbonaceous metamorphosed sediments on the eastern escarpment of the Cordillera Oriental of the Andes Mountains. Ollachea is also located on the northern extremity of a northwest-trending sedimentary belt that extends northwards from Bolivia through southern Peru.
The local geological setting is bedded slates and sandstones that are structurally deformed and in close proximity to intrusive bodies. Gold mineralization occurs within a well-defined shear zone and is contained within seven discrete west-striking, north-dipping structures. Gold mineralization is associated with a sulphide assemblage that consists of pyrrhotite with minor pyrite, arsenopyrite, and chalcopyrite. Free gold is frequently observed in drill core.
The cumulative, drill-indicated strike of the mineralized trend at Ollachea is several kilometres long and remains open ended in both directions.
We sponsor and support a number of community programs that focus on improving conditions where we are and to knit much closer our ties with local residents.
We have set up an active program of producing vegetables, fruits and other plants in our pilot project known as Kunkurchacra, where we showcase modern productive practices. Local residents, including schoolchildren, receive training aimed at helping them boost their own agricultural output.
Hundreds of community members benefit every year from the harvests of organic foods from the pilot program, while we also help train families to produce in their own gardens and orchards. We help train primary and secondary school children in Ollachea to work on two orchards and gardens.
We also help local families in raising guinea pigs for reproductive purposes and in producing forage.
Our projects aim at developing technical skills for making arts and crafts that directly benefit women at various skill levels in Ollachea. The projects help produce things like hats, sweaters, and ponchos that are sold or used in the local communities.
The Company carries out plantings of thousands of ornamental trees and fruit-producing varieties during the year. Minera IRL also maintains bee hives and gives honey to members of the local communities, as well as providing training so that community members can learn how to keep bees.
The Company works to promote the heritage of the Puno region through folklore projects, such as folk dancing and music training programs.
Minera IRL has helped support senior citizen support programs, including serving lunch meals for the elderly.
A highlight of the year is the Christmas festival, which draw thousands of needy children and community members. The campaigns included delivering toys to a large number of boys and girls, as well as the distribution of chocolate and Christmas cake to everyone. The festival in 2016 was the twelfth straight years of Christmas celebrations.