"There is a lot of information that could be used, and with this crisis there are personnel available to work on data analysis that could identify high potential areas within the operations for additional production."

Antonio Samaniego

DIRECTOR, SRK CONSULTING

October 30, 2020

What have been the main areas of work for SRK in Peru during the pandemic?

The main effect of the pandemic has been the restrictions on field work. We were only able to go back to the mines and projects in late June, and in a very limited way. We have all been working from home for the most part. We have had to work a lot with information provided directly by mining companies with our remote guidance. Besides this, there has been a lot of optimization work to reduce costs.

Now that mines have reopened, demand is coming mainly from mineral resource and reserve verification and due diligence for capital investments. We have requests of due diligence for the new S-K 1300 standard from the US Securities and Exchange Commission (SEC) for the few companies trading in the American market that will have to present these reports in 2022. We did a very thorough SEC-compliant report for Nexa Resource, for instance. We have also done NI 43-101 PEA reports for Canadian-based juniors that work in Peru, as well as due diligence independent reports for banks and M&A for credit institutions.

Could you provide examples of some of the interesting projects you have been working on?

An important project has been an evaluation of all reserves and resources for Buenaventura’s mines, which required sharp analysis to define the cutoff grades because of the high volatility of metal prices. We also undertook mining optimization work for Hochschild and have worked on an ore sorting project with them. Overall, the crisis has put many new projects on hold and most projects are related to operational optimization and expansions of tailings dams for current operations.

This pandemic has made us work very strongly together with the other offices of SRK worldwide. For instance, we have worked on a very interesting project with SRK Sudbury for a 10-year strategic plan for El Brocal, looking at the best plan for how and when to mine the copper and zinc areas.

What advice would you give to mine operators to make the most of the current high prices?

Peruvian mines use quite a lot of technology, but sometimes they could benefit from an additional step toward automation and machine learning with the use of big data. There is a lot of information that could be used, and with this crisis there are personnel available to work on data analysis that could identify high potential areas within the operations for additional production. This way they could benefit from the current cycle, because any new projects will require lengthy permitting and they will not be in production during this cycle.

How are industry standards evolving with regards to tailings management?

All associations and professional bodies are releasing their tailings management reviews and guidelines, such as the ICMM. As former president of the Peruvian Institute on Mining Engineers (IIMP), I have been participating in the Global Mining Professionals Association (GMPA), a group including SME, CIM, AusIMM, SAIMM, IOM3, IIMCh and IIMP, which are the leading mining professional institutions worldwide that got together to improve visibility of the mining industry. Last year we had a meeting in Arequipa, Peru where we launched the Global Action on Tailings (GAT) working group. We have virtual meetings every three months and we are working on several initiatives related to tailings management.

How is the future shaping up for SRK in Peru and globally?

In Peru, we have a team of more than 100 professionals, and our main objective is to maintain the team during these challenging times, while we also prepare the next generation of company leaders. Globally, SRK employs 1,400 people and we are trying to work as “one SRK”, to identify the best people for each area of practice and better serve our clients.

Finally, we are working a lot on innovation. Our Vancouver and South Africa offices, for instance, are developing rock mapping methods using satellite images and photographs, which is very valuable today, as we are unable to send geologists on site.

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