"We are focused on the development of technical reports according to S-K 1300 regulation, which will be mandatory for all NYSE listed mining companies after January 2022 to support their reported mineral resources and reserves.”
When we last spoke in August 2020, Covid had restricted a lot of the field work consultancies could do. How have things evolved since then, and which of SRK’s services have been in high demand?
There has been little activity related to field works, mainly because most of the constraints to accessing the sites are still in force. We have continuously searched for alternative strategies to compensate for the difficulty to access the sites, such as the implementation of advanced video conference tools, the use of remote sensors and satellite info, and works with drones. In parallel, we have needed to hire qualified staff in the handling of these tools and to improve our IT infrastructure. In the last months, we have been busy mostly with works related to project evaluation, bankable reports, geotechnical assessments, mine closure plans, and big data processing. We have noted an increment of requests for proposals as mining companies are catching up with work from the past.
Despite the difficulties of the pandemic, 2020 ended up being quite a good year for SRK. We did a good job retaining and recruiting talent and had good results in Peru.
Can you give us examples of some of the technical study work SRK has been doing in the last year?
We are focused on the development of technical reports according to S-K 1300 regulation, which will be mandatory for all NYSE listed mining companies after January 2022 to support their reported mineral resources and reserves. We consider that this regulation is one of the most strict and demands a high technical level for its preparation. SRK Peru is supporting three world-class companies in this process in collaboration with Denver (USA) and Belo Horizonte (Brasil) offices. In SRK Peru, we have also been involved in mine closure plans for some of the very large gold operations.
Have you seen more activity in the junior segment considering the high metals prices?
We have seen more activity from the junior segment, and we have been working on a number of PEA studies for juniors in Peru, as well as some pre-feasibility studies. However, the current political situation and some limitations due to the pandemic (such as delays in the vaccination process) have limited the growth of activities and investment of junior mining companies in Peru. Additionally, as part of M&A processes, we have done technical and economic due diligence for banks and mining companies, which implicates junior companies commonly.
Can you tell us about your participation with the Global Mining Professionals Association (GMPA), and SRK’s expertise when it comes to tailings management?
In Peru we are advancing on the Global Action on Tailings (GAT). This initiative has been developed under the GMPA sponsorship. Our idea is to propose strategies for an adequate tailings build, management and close. The SME, a GMPA member, is working on a tailings handbook that should be published over the last months of 2021. The handbook will cover new topics that we need to look at when looking at tailings management, such as climate change.
What advice would you give to mining companies looking to invest in Peru about how they should prepare for the early stages of a project?
Peru offers several advantages for the mining industry, starting with a great geological context, highly qualified mining professionals and adequate logistic and supply facilities, besides the long mining tradition in the country.
The energy supply has improved over the last years, in terms of capacity and cost, however, a number of challenges on other infrastructure fronts, mainly the ports, roads and rails, continue.
On the regulations side, Peru has a comprehensive environmental regulation, but permitting and law enforcement is not effective, because the related government entities do not have enough resources, hence an EIA can take up to two years to be approved by the authorities.
Finally, companies need to treat the social aspect very carefully in Peru.
Taking into consideration all aspects, I consider Peru is still one of the most attractive countries for investment in the mining industry.