In this interview, Luquman Shaheen, President of Panoro Minerals, talks to AZoMining about current projects and the benefits of mining in Peru.
Could you please provide a brief introduction to Panoro Minerals and the sector which it works within?
|Luquman Shaheen, President of
Panoro is a copper exploration company, with all of our projects in Peru. We have 14 different projects, and the most advanced project is the Cotabambas copper-gold project. The Cotabambas project has a 90million tonne resource, with a very good copper grade at 0.77% with 0.42 grams per tonne of gold, so it is a high grade resource. We are currently finishing a 10million dollar, 24,400m exploration program and expect to announce a new resource estimate in July. Following this, we will be investing another 15million dollars into the Cotabambas project, with up to an extra 30,000m of drilling,targeting continued resource growth.
Could you please provide a brief history of the Cotabambas project?
Panoro acquired the project in 2007, and the work up until 2007 was carried out by a Peruvian exploration company called Cordillera de las Minas (CDLM). We started exploration in late 2010.
The Cotabambas project is located in South Central Peru, in the region of other large projects such as the Las Bambas copper project by Xstrata. Xstrata is also building other projects in the area and there are many other stand-alone projects being developed in the region.
How is Panoro currently involved in the Cotabambas project and when do you hope to start production?
Cotabambas is still very much an exploration project, and there is a lot of work to do.The main deposit remains open in many directions, so we will continue drilling in the next year to define the scale of the resource, then we will move into feasibility studies and permitting, which will take another 1-2 years. So I would say there is at least 3 years’ worth of work before the completion of feasibility studies and we could contemplate the construction of a new mine.
How Much Drilling has been undertaken at the site so far? Are you currently happy with the results?
Yes, very happy! Prior to our acquisition of the site the total drilling was about 11000m-we are currently at 24000 metres and have another 30000m planned, which takes total drilling to by first quarter next year to something north of 65000m. We are still at an early stage, because the potential for this project is large, so we are still defining resource potential with our drilling program.
Image credit: Panoro Minerals
Our drilling results have been very encouraging as we continue to intersect the high grade mineralisation both to the north, west and east sides of the deposit, as well as at depth. The deposit appears open in many different directions.
Plus to the north side of the deposit we have identified 2 new geological zones. One is a gold-enriched cap, which is at or near surface, and is more than 70m thick with more than 1gram per tonne gold. Right underneath the cap is a supergene enriched zone with copper grades of above 1.5% copper and gold grades of over 0.5g per tonne which is also open to the north. So our continuing program will also be designed to delineate these zones to the north.
At what depth are you finding economic mineralisation?
The current resource includes mineralisation at the highest grades starting at or near surface and down to about 400m depth. The ore body remains open at depth and we will in subsequent stages investigate further vertical continuity. It is a little early for us to say to what depth it will be economic, but with the high grades that we continue to intersect, the potential for this to be a large, open pit mine is very significant.
Panoro has recently approved an Environmental impact assessment for Cotabambas -could you please tell us more about this?
Our environmental impact assessment is for a 200 drill hole program and has been approved so we now can drill holes from up to an additional 200 drill holes pads. To put this in context, the current drilling at the site by Panoro and CDLM in total is around 75 drill holes. We are hoping the additional 200 holes should be sufficient drilling to advance the project into feasibility levels. We completed a financing in March 2012, so we have the money to do our drill program and now we have the permit to carry it out.
Image credit: Panoro minerals
In your opinion, how healthy is the current outlook for the mining industry in Peru?
Peru is a very significant mining country, with half of its exports coming from the mineral sector. It is a significant worldwide producer of copper, silver, gold and tin so its economy is heavily invested in the mining sector. For example, Peru is the world’s 2nd largest producer of copper. The new government, sworn in last year, has been very pro-mining development making Peru a good place for on-going investment.
The key issue, relating not just to mining but other resource areas too, is the relationship with indigenous populations. This is in some people’s minds a new issue, but that is not the case, the indigenous affairs issues are an evolving story over the past two decades.
Over and over again what has been demonstrated is that it is important for exploration companies like Panoro to have good local relationships with the local communities. At the Cotabambas project we have 3 indigenous communities in the area and we have signed socio-economic agreements with all three of them. We also have a very strong Peruvian team within our company; in fact we only have two non-Peruvians that work in the company. Our main operations office is in Lima, and all of our community relations staff are Peruvian. We think that we do a very good job in maintaining very strong local contacts with the indigenous communities.
Does Panoro have any plans to expand operations into other nations?
At the moment we are focussed on Peru and have a large portfolio of projects here, so we have our hands full with Peru. Furthermore, we are traded on the Lima exchange and two of our directors live in Peru and over 25% of stock is held in Peru, so we remained focussed on the vast potential of our projects in Peru.
How do you see the mining industry in general progressing over the next 10 years?
I think great steps have been made by the mining industry to understand what sustainability really means in the last 10 years and I think this will continue. The main lesson that has been learned is that you have to understand local issues, as each local community is different with different priorities, outlooks, needs.
Panoro is in the copper business, and in this area of mining, the on-going urbanisation and industrialisation of developing nations, such as China, is key. For example, China is targeting 8% a year growth, and only once in the last 25 years has the Chinese government failed to exceed its growth plans. China is now less of an export focussed economy and more of an internal consumption economy and where there is growth, this means more copper will be used. I see the copper exploration business as been very strong in the next decade as demand remains strong. Copper prices, despite what people think, are still at or near historic levels.
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