A case example of grass roots exploration in the Republic of Peru and the difficulty of administrative procedures

Abstract

The Cancha prospect, which is 100% owned by Sumitomo Metal Mining Co., Ltd. (SMM), is located in Huancavelica department, Republic of Peru. SMM started its prospecting survey in 2012. Geological studies and electric survey found out strong phyllic alteration accompanying sheeted quartz veins with gold-copper geochemical anomaly which corresponded with distribution of low resistivity and high chargeability anomalies. The alteration zoning with increasing depth typically grades from a shallow advanced argillic zone through phyllic zone into sericite–chlorite zone, which is interpreted as typical telescoped porphyry related system. Since Au-Cu porphyry type mineralization is expected in the project, SMM is proceeding procedures to obtain required permissions from the various different authorities. To carry out drilling exploration in Republic of Peru, it is required to complete Declaration of Environmental Impact (DIA) and its related permissions such as local community agreement, water use license, certificate of absence of archaeological remains and indigenous community protection protocols, which can take more than a half year or several years. Additionally, as the mine closure laws are applied to the early stage exploration projects, the environmental management obligations are imposed for many years after the project closing. Mining right holders should conduct more careful and long-term management and monitoring over projects than in other mining countries.