In just over a decade, a leading role has been carved out in South America with three separate gold strikes
Most of us would think ourselves fortunate if we struck gold once in our lifetimes, but Courtney Chamberlain has done it three times in a decade.
Minera IRL, the company he founded in 2000 and floated in 2007, operates the Corihuarmi mine in Peru’s central Andes, which produces just over 30,000 ounces of gold a year, worth about $45m (£28.7m).
Corihuarmi pays all the firm’s running and exploration costs, and has enabled Minera IRL to establish itself in Peru as a highly successful gold mining company with about 500 staff and a market capitalisation of $150m (£95.8m).
But what really puts the spring in Chamberlain’s step is the potential from Minera IRL’s next two mining projects. “Our gold reserves have increased dramatically in the past three years, from 100,000 ounces to 3.2m ounces,” he says.
“More than half of this is ‘measured’ or ‘indicated’, meaning that it’s been verified by independent experts and we have high confidence that we can successfully extract it.”
In late 2008, the company’s geologists made a major discovery at Ollachea in southern Peru, on the eastern escarpment of the Andes. The reserves discovered so far are estimated at 2.6m ounces (worth around $4 billion, or £2.5 billion, at current prices), but there could be much more.
“Currently the deposits are completely open-ended,” says Chamberlain. “They’re deepseated, ‘orogenic’ deposits, so we may be just at the beginning in terms of discovery. There will be more gold, but how much we don’t yet know.”
The company is now conducting a full feasibility study for the first one million ounces of gold. “When that’s finished we’ll be ready to go to the market and say, ‘We need $170m (£108m) to build this thing,’” says Chamberlain.
“We aim to start production in late 2014 and extract 120,000 ounces a year for at least nine years. Gold has been mined in the area since before the Spanish came, and Ollachea will be one of the biggest gold mines in Peru.”
Ollachea will use conventional mining techniques, and the cost of extraction is estimated at around $400 (£255) per ounce: less than the industry average of $600 (£383) and just a quarter of the value of the gold itself.
Chamberlain is particularly proud of the relationship Minera IRL has established with the local people of Ollachea, who still own the land on which the mine will be built.
“We’ve won them over by working closely with them and making them our partners for the future. This is really important in Peru and it’s not the kind of thing all mining companies do well, so we’ve put a lot of emphasis on it. We’re also trying hard to improve their standard of living, lifestyle and health.”
Around 200 of the mine’s total workforce of 500 will probably come from Ollachea, and Minera IRL has set up a scholarship programme for the area’s young people to study relevant subjects at university.
No such initiatives will be required at Minera IRL’s other major prospect, Don Nicolas in Patagonia, Argentina. “The nearest village is 100km away, and only cougars and geologists live down there,” says Chamberlain.
“But the main highway from Buenos Aires to the Straits of Magellan crosses the property so logistics are good, and the provincial government is very mining-friendly.”
Minera IRL owns 2,700 sq kilometres of derelict former ranching land in Patagonia. The company published a resource study in August which found 380,000 ounces of measured and indicated reserves plus another 145,000 ounces of inferred reserves.
A feasibility study will be complete by early next year and, if all goes well, the mine should be in production by 2013, initially producing 50,000 ounces of gold a year for four years.
Like Ollachea, Don Nicolas may still have a lot of undiscovered potential, says Chamberlain.
“Many of the veins are still untested, and after a little bit more work we expect to extend the life of the mine.”
Minera IRL expects to be producing about 200,000 ounces of gold a year by 2015, but the company is looking to establish a “third generation” of mines by the end of the decade.
“Our objective is to create a pipeline of mines and build ourselves into a sizeable mid-tier gold producer,” says Chamberlain. “That will be a great achievement for a company that’s come from nothing in 11 years.”