Minera IRL Ltd., a U.K. gold producer with a mine in Peru, dropped the most this year after a newspaper reported that protests may resume where the company is developing its Ollaechea gold project.
IRL plunged 10 percent to 70 cents at the close of trading in Lima, the biggest decline since Dec. 14. The stock has slumped 39 percent this quarter.
“Any noise about mining will hit this project,” said Carlos Rojas, a trader at Andino Asset Management SAC. “IRL’s Corihuarmi mine only has another five years of production left, so the company’s counting on the Ollaechea deposit.”
Walter Aduviri, who headed demonstrations that forced the government to suspend Bear Creek Mining Corp.’s Santa Ana silver project in the southern Andean Puno region last year, may resume protests, La Republica reported yesterday. IRL’s $170 million Ollaechea deposit is located in the same area.
Community protests in Peru have suspended projects operated by Newmont Mining Corp. and Southern Copper Corp., undermining a government drive to attract $50 billion of mining investments in the next decade.
IRL, which is also developing the $60 million Don Nicolas gold project in Argentina, may face difficulties after the government of President Cristina Fernandez de Kirchner restricted access to imported mining equipment, Rojas said.
Coeur, Idaho-based Coeur d’Alene Mines Corp. said yesterday it will reduce activity at its Martha gold and silver mine in southern Argentina because of rising operational costs.
IRL isn’t aware of any specific factors causing the stock’s decline, President Diego Benavides said today in a telephone interview.
The company plans to have financing in place within six months to develop mines in Argentina and Peru, Benavides said in a May 15 interview.