Manhattan tallies EIS for Tambo Grande

Vancouver – The long road to developing the large Tambo Grande massive sulphide property may be entering the final stretch with Manhattan Minerals (MAN-T) delivering an Environmental Impact Study (EIS) on the Peruvian project.

The junior tabled the study on the TG-1 project to the Government of Peru through the Ministry of Energy and Mines, satisfying a requirement of the option agreement with the Peruvian Government on the concessions.

“We are very pleased with the outcome of the Environmental Impact Study,” says Manhattan’s Chief Executive Officer, Lawrence Glaser. “We have met stringent international standards using the very best engineering principles to design a mining operation that will ensure the region’s agricultural industry can co-exist with mining to improve the region’s standard of living.”

Completed by Klohn Crippen Consultants, the report outlines several financial benefits for moving ahead with the project including employment and capital costs.

During construction employment is expected to reach 3,000 workers and average over 1,000 for a period of up to three years. Once in operation, the mine is slated to employ 350 people with total wages hitting US$100 million over the 12 year operating life of the project.

Including construction, operations and closure time, the 17-year project life will result in US$405 million in capital expenditures, not including the expenditures on the purchase of goods and services needed to support operation of the facilities.

A potential problem spot continues to be the relocation of the towns’ 1,800 buildings to make room for both the open pit and a buffer zone between the pit and the remaining portion of the town. Manhattan proposes to create an entire new neighborhood and urban center, adjacent to the town. The affected residents can choose either a new home in this area or can be compensated. According to Manhattan, the resettlement plan follows World Bank policy and guidelines developed by the International Finance Corporation. All residents of the new neighborhood will have electricity, fresh running water, a sewage system and paved streets.

Earlier this summer, residents of Tambo Grande overwhelming voted against the project’s development in a local, non-binding referendum. Because some of the deposit underlies part of the town, about half its population (16,000) must be resettled if mining is to proceed — a contingency the company has accounted for in its capital projections.

In response to the vote, Roberto Obradovich, who heads up Manhattan’s local unit, told a Peruvian radio station that “the vote was full of flaws,” adding that “it seems suspicious that ninety-three or ninety-four per cent voted no, whereas ten thousand people didn’t turn up. We have to assume that means that those absent at least want to hear more about the project.”

According to wire reports, nearly 98.7% of the valid ballots were opposed to Manhattan’s plans, but 27% of the 36,000 eligible voters failed to turn out.

On the environmental side, the study proposes that the tailings impoundment be designed with a double liner system and be built large enough to facilitate co-disposal of all potential sulfide waste rock. Water diversion dykes have been re-designed to provide flood protection for the town and none of the water used in the mine operation will come from the agricultural irrigation system’s canals or reservoirs.

“I’m confident that after reviewing the EIS, the citizens of Tambo Grande and the Peruvian Government will agree we have the capacity and desire to build a mine that will benefit us all,” adds Glaser.

A feasibility study over the project envisions a yearly production of 86,000 tonnes copper and 41,000 tonnes zinc. Mining is set to begin with the TG-1 oxide gold-silver deposit and end with the underlying sulphide reserve. The first phase is now expected to cost US$180 million to complete, and the second, US$145 million.

Stripping ratios are pegged at 2.6:1 for the first phase and 1.1:1 for the second. On average, 7,500 tonnes of material will be sent to the mill daily in the first two years — 10,000 tonnes in the third year and 20,000 tonnes in the fourth, when the grinding line from the gold-silver circuit is converted.

Annual production from the oxide deposit, which will be depleted in 3.5 years, is forecast at 260,000 oz. gold and 3.2 million oz. silver. The base metal operation lasts nine years.

Probable reserves in the oxide portion of the TG-1 deposit total 8.2 million tonnes grading 3.34 grams gold and 58.7 grams silver per tonne. The sulphide portion has probable reserves of 57.8 million tonnes running 1.5% copper and 0.9% zinc, plus 0.5 gram gold and 25 grams silver per tonne.

The project has been plagued over the past few years with vandalism and local opposition to development. The mines minister at the time, Carlos Herrerea Descalzi, noted that while the final decision will rest with the people, it was important for them to wait for the conclusion of all studies. He said the law did not oblige that the project be executed “if the people do not accept it.”

Since then, a new government has been elected, led by Alejandro Toledo. At the country’s 25th mining convention, held in September, Toledo vowed to keep mining strong in Peru.

Manhattan can earn a 75% stake in Tambo Grande, which consists of 10 concessions measuring 100 sq. km.