Inca Pacific eyes cash for mine as waits on permit

By Terry Wade

SANTIAGO, April 8 (Reuters) - Junior miner Inca Pacific (IPR.V) has filed the environmental impact statement for its Magistral copper project with Peru's government and expects to have all approvals and financing lined up for the mine by December, its top executive said on Tuesday.

Chief Executive Tony Floyd told Reuters by telephone during the CRU/CESCO copper week in the Chilean capital Santiago that his company was talking with banks to raise up to $450 million to build the mine.

"We hope to start construction in the first quarter of 2009 and begin production by 2011," said Tony Floyd, chief executive of the Canadian company. "2008 is our permitting year ... We're in discussions with all the major banks."

The Magistral copper-molybdenum project is located some 450 kilometers north of Peru's capital, Lima, in the department of Ancash.

Inca Pacific completed its final feasibility study in December. It showed 114 million tonnes of proven and probable reserves of mineral, with a copper grade of 0.5 percent and molybdenum at 0.05 percent.

The company projects a mine life for Magistral of 15 years once the mine opens, delivering some 20,000 tonnes per day of sulphide ore to a primary crusher.

He said the company will build the mine, even though selling itself to a larger producer could be an option.

"We can't commit to one or the other," he said.

Chinese companies hungry for ore bought mining projects three times in Peru last year, including the Toromocho property of Peru Copper for $790 million. More deals are widely expected as big miners buy little ones.

"The reality for any company like ours is that you must aim to build the mine, but there's a voracious appetite out there," Floyd said. "We always have to be exploring the possibility of maximizing shareholder value. (Editing by Christian Wiessner)