Ricardo Carrión, Capital Markets Manager of Kallpa SAB and member of the organizing committee of proEXPLO 2023, an event organized by the Peruvian Institute of Mining Engineers, lists the actions that our country should implement to trigger investments in the search for new deposits, the countries with which we compete to dazzle junior mining companies and some of the exploration projects that have a better future.

What are junior mining companies and why are they so important?

These are companies dedicated to exploration activities and are important because they carry out specialized work for the search and prospecting of deposits that may be put into production in the future, whether they are small, medium or large. In addition, they assume great risks for the discovery of mineral deposits that could be economically exploitable or not, so this work must be led by professionals with vast experience to maximize the chance of success of the exploration project and minimize the threat of not finding anything.

How interested are junior mining companies in Peru?

The interest is marked by three pillars. The first is the geological potential, where we stand out for our great mineralogical diversity, which has led to large megaprojects today and it is very likely that we have the capacity to continue finding even larger mines. The second is macroeconomic stability, which we have enjoyed for the past 30 years. And the third pillar is the social-political ecosystem, in which we have had ups and downs for the last two years, which has partially paused exploration.

Exploration activity is correlated with the investment world, so we can say that if investors see that a country has geological potential and macroeconomic stability, but does not have the will to do things right politically and socially, the exploration investment process stops. So, there is currently interest in the first and second pillars, but also concern about the third.

How many such companies explore or list in the country?

We must understand that exploration activities can be carried out by companies focused on developing new projects, as well as by large companies in need of expanding operations or replenishing reserves. Between these two groups there are an estimated 300 to 400 exploration projects in Peru, according to official statistics.

The mining companies that lead most of these ventures in our country are listed on the stock exchanges of Australia, Canada, the United States and the United Kingdom. And of this universe, around 10 mining companies also maintain a listing on the Lima Stock Exchange.

Which exploration projects stand out the most?

We have early and advanced stage exploration projects. In the first group we can highlight Soledad project of Chakana Resources, Elida of Element 29 and Dorita of Silver Mountain Resources, which show good progress and interesting results in copper and silver prospecting. On the other hand, the second group includes the Cotabambas project of Panoro Minerals, Cañariaco of Candente Copper and Ayawilca of Tinka Resources, which are of copper or argentiferous origin. These projects show an estimate of resources and reserves and are more likely to enter the pipeline of future production units of the national mining sector.

What are the biggest challenges for mineral exploration?

Historically, the challenge has been geological, as exploration activities are high risk and this can be mitigated with teams that have sufficient knowledge and experience to take a project forward. Another challenge is the search for investors, since factors such as wars, recessions and others restrict the flow of capital for the continuity of the project. There is also the challenge of the political and social environment, which is specific to each jurisdiction and which translates into problems such as social conflicts or high public bureaucracy, which delay the execution of exploration projects and increase their costs.

How could our country attract junior mining companies?

First, as a country we must offer a political message that vindicates mining as one of the drivers of economic and social growth, and that it should be considered in the development agenda of the different governments we elect. Second, we must reduce red tape in order to stimulate the development of projects in shorter time frames, and everything related to permits and financing. And, third, is to improve interaction with the surrounding communities, which is much more complex, as it involves closing gaps as the project progresses and this is resolved in the long term.

So, if we want to take advantage of good mineral prices to increase tax revenues, build infrastructure and generate social welfare, that is, to achieve sustainable development in the future, it is imperative that we focus on current exploration projects, taking into account that all mining prospects that we begin to evaluate now will probably bear fruit in 15 or 20 years' time.

With which countries do we compete for such companies?

It is difficult to establish a competition, because each country has its pros and cons. For example, Canada and the United States have a mix of geological potential and political and macroeconomic stability, making them quite attractive jurisdictions. For its part, Chile has good conditions with respect to permitting. On the other hand, Peru has a much more interesting geological potential and macroeconomic order, but not complete political or social stability. Therefore, it is more feasible for companies to invest in exploration in the aforementioned countries than in ours.

Therefore, I believe that each of these experiences must be gathered and adapted to our reality in order to be more competitive.

What are your expectations for proEXPLO 2023?

ProEXPLO 2023 has received wide interest from the community of professionals, businessmen and investors, and is being carried out at a particular point in time of high mineral prices, which should be a driving force to promote the discovery of new prospects and the consolidation of exploration projects in the portfolio, for which we are precisely competing with other countries to attract more capital from abroad, and for this purpose our best presentation card as a country is our geological potential and macroeconomic stability.

In this sense, the event will feature the presentation of eight promising mining exploration projects, with which we intend to motivate the arrival of junior mining companies and large mining companies to increase their participation in the Peruvian market.

Corporations, investors and prospectors have shown interest in working together to revive the mining exploration sector in Peru, and if this is accompanied by political will, it will be spectacular. So I think we will probably have one of the best editions of proEXPLO in the last ten years.

proEXPLO 2023: Discovering the mining of the future