Rio Alto Mining eyes start of its Peru project

Rio Alto Mining eyes start of its Peru project

LIMA - Rio Alto Mining, a small Canadian miner, said on Wednesday it expects to start construction at its Peruvian copper and gold project around the middle of next year and that production should begin before the end of 2010.

The La Arena project, located in the northern region of La Libertad, has reserves of some 4-million ounces of gold and 3-billion pounds of copper. The mine is expected to have a life span of 20 years.

Rio Alto Mining is moving forward in Peru, a major metals exporter, where a number of other companies have postponed or canceled developments because of last year's drop in metals prices and tough financing conditions.

Minerals have climbed back this year, but not to peak levels, and financing for new mines remains tight.

"In the second half of 2010, the project will be built so that production can start at the end of 2010," Alex Black, chief operating officer, told reporters in Lima.

He estimated the mine would produce 50 000 ounces of gold in its first year and then 100 000 ounces per year after that, for five or six years.