Peru’s mining industry has been on the upswing in recent years and is headed higher still as investors continue to pump money into projects. The country’s mining construction portfolio now totals $56 billion and will likely continue to grow following the new mining minister’s vow to streamline the permitting process. The renewed interest in the sector presents an excellent opportunity for precious metals producers like Rio Tinto plc (NYSE:RIO), Barrick Gold Corp (NYSE:GOLD) (TSX:ABX), Fortuna Silver Mines Inc (TSX:FVI) (NYSE:FSM), and Gold Fields Limited (NYSE:GFI). It also creates a favorable opportunity for exploration companies like Oro X Mining Corp. (TSXV:OROX) (OTC:WRPSF).
Oro X Mining is a gold exploration company focused on developing its gold projects in mining friendly Peru. The company underwent some significant changes throughout 2020, including a name change, new management, numerous acquisitions, and a capital raise.
Gaining a Stake in Peru’s Prolific Mining Regions
When the Peruvian government named Jaime Galvez as the new head of the Ministry of Energy and Mines (MINEM), the minister vowed to streamline the consultation period prior to granting mining licenses as part of a set of planned reforms to Peru’s mining regulations. The potential changes will not only speed up current projects, but it will guarantee existing operations as well as promote investment and exploration.
The reforms bode well for Oro X Mining, which has acquired two promising gold projects in the region. In October 2020, the company completed the acquisition of the Coriorcco and Las Antas options in Peru, two high-grade gold exploration assets located within an established metallogenic belt in the San Juan de Lucanas Mining District. At the same time, Oro X Mining announced the closing of a $6.25 million private placement, which it plans to use for exploration at its 2,000 hectare past-producing high-grade Coriocco gold project.
Oro X Mining’s flagship Coriocco project has 17 known mineralized veins at surface with widths ranging from 1.0 to 2.5 meters (m) within a 700m by 800m zone. Previous exploration activity at the property includes surface channel sampling and follow-up trial mining completed in 2010 to 2011. Three portals were developed and over 400m of sub-horizontal mining were completed on three veins up to 60m below surface within the silica cap of the Coriorcco dome structure. Previous historic development on two of the tested veins exploited over 7,500 tonnes of material averaging 7.5 grams per tonne (g/t) gold, while limited surface rock sampling by the previous operators include:
Past Production Points to Bright Future for Peru’s Mining Industry
The mining industry in Peru has been historically important to the nation for over 500 years and has been home to a large number of high-grade gold and copper projects. In 2019, Peru tied with Ghana as the seventh largest gold-producing country. Peru is also the second-largest copper producing country with estimated copper mine production of 2.4 million metric tons and the second-largest silver producer.
Although gold giant Barrick Gold Corp (NYSE:GOLD) (TSX:ABX) is no longer focused on projects in Peru, the company contributed to the country’s position as one of the top gold producers on the planet. Prior to closing its Lagunas Norte mine in 2019, 2018 production totalled 245,000 ounces of gold, while the company’s Pierina mine produced 97,000 ounces of gold in 2013 prior to its closure.
Rio Tinto plc (NYSE:RIO) has also had a mining history in Peru that dates back to the 1990s. Some of the copper giant’s most significant deposit finds include Pampa de Pongo, Carhuacayan, Yanque Accha, and Pukaqaqa. Last year, Rio Tinto was in talks with First Quantum Minerals to team up to develop La Granja, one of Peru’s largest untapped copper deposits. However, a deal has yet to materialize.
Fortuna Silver Mines Inc (TSX:FVI) (NYSE:FSM) is one precious metals producer that has continued to work within the region. In 2019, the company’s Caylloma mine in Peru produced 900,000 ounces of silver, 28.7 million pounds of lead, and 45.6 million pounds of zinc.
Gold Fields Limited (NYSE:GFI) is another precious metals producer with a stake in mining friendly Peru. In 2018, the company announced its plan to invest $240 million to extend the mine life of its Cerro Corona mine, which has now been extended until 2030. In 2017, the Cerro Corona mine produced 5.1 million grams of gold.
It will be exciting to see how the new mining regulations benefit Oro X Mining Corp. (TSXV:OROX) (OTC:WRPSF) and the development of its Coriocco gold project.
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