Junior mining companies in Peru are feeling the pinch of falling metal prices and a lack of financing to fund exploration projects.
A shortage of financing has hit mining companies hard on the Lima Stock Exchange. The bourse is down more than 15 percent so far this year, with the mining sector down 37 percent and the junior mining subsector down 40 percent.
Vancouver-based Candente Copper Corp. said it would temporarily halt drilling at its Cañariaco copper project in Peru’s Lambayeque region.
“Given our progress to date and the current global downturn in economic conditions for mineral exploration and development, the Company is reducing expenditures to a minimum while we evaluate program results and costs to date,” Candente said in a statement. “This reduction includes a temporary suspension of drilling activities.”
The company said that it would continue with sustainable development programs in Lambayeque.
Meanwhile, Canada’s Rio Cristal Resources announced that it terminated its option agreement to buy its Bongara zinc project in northern Peru.
“We are disappointed to drop the option to acquire the Bongara property but the lack of financing over an extended period of time in the Canadian and Peruvian equity markets leaves us no choice,” said CEO Thomas Findlay.
“The current option agreement includes significant payments which, with the carrying cost of the property, the Company is unable to support,” he added.
Rio Cristal said it is to seek partners and investors to explore for mineral projects in Peru. “The company has identified six projects which it would pursue as exploration projects if funding is available,” Findlay said.