Rio Alto Mining Ltd. (TSX:RIO) has received mining permits from the General Bureau of Environmental Affairs (DGAA) of the Ministry of Energy and Mines (MEM) of Peru for the La Arena resource in north central Peru.
The district is home to a number of world class and medium size gold mines including Barrick Gold’s Lagunas Norte Mine, 15 km west of La Arena (2008 production: 1.2 million ounces of gold ), Newmont´s Yanacocha Mine, 100 km to the north (2008 production: 1.8 million ounces of gold), and 10km to the north of the privately owned La Virgen Mine (2008 production: approx 80,000 ounces of gold).
La Arena contains 2.8 million ounces gold and 1.7 billion pounds copper in indicated resources with additional inferred resources of 1.2 million ounces gold and 1.2 billion pounds copper.
The announcement made saw the shares of the Canadian mining company rise to an eight month high. The shares have already doubled in the last year and jumped 12 percent after the $30 million La Arena mine was said to begin processing ore by December 2010.
La Arena location and geology. Image Credit: Rio Alto Mining Ltd
The La Arena mine is expected to produce close to 100,000 ounces of gold by next year as per Alex Black, the Chief Operating Officer. Rio Alto Mining, with its headquarters in Calgary has also said that while five months seem a short time to set up a mine the first stage of gold oxides is very simple.
The civil works contract for La Arena has been given to Consorcio TIWU to build the leach Pad, Waste Dump and infrastructure. The company has already entered into a term sheet for a $24.25 million gold pre-payment facility.