Loading ...Minera IRL power struggle threatens Peruvian gold project
LONDON – A corporate power struggle, along with what appears to be a major clash of personalities and a breakdown in community relations, appears to be threatening the future of the promising Ollachea gold project in Peru.
In so doing this potentially threatens also the whole future of Minera IRL, the London, Toronto and Peruvian listed company, which was planning to bring the project into production by 2017.
As mining companies operating in Peru have sometimes found to their cost, relations with the local community are key to whether a project can sink or swim. Over the years the trust built up by Minera IRL management under the guidance of former President and CEO, Courtney Chamberlain who tragically passed away in April, and former co-founder Diego Benavides, with the Ollachea community had been seen as a model of the way to set about this.
But all this trust appears to have been dashed by local interpretations resulting from a community meeting addressed by the company’s recently appointed Executive Chairman, Daryl Hodges. Hodges was reporting on the key US$70 million credit facility with Peruvian state-owned development bank, COFIDE.
By many accounts, Hodges’ statement was apparently not well received. Now whether this was due to a misunderstanding of new Minera IRL policies given that Hodges, a non-Spanish speaker addressed the community in English via an interpreter, or because the community obviously favoured Benavides, whom they knew well, is uncertain. But the net result of what has so far proven to be an ill-judged presentation by Hodges, was a letter from the Community leaders withdrawing all support for the project under current management and calling for Benavides to be confirmed as CEO.
Hodges has an excellent track record in the financial community, but perhaps may not be so skilled in dealing with local social and community issues. The initial result has thus led to the deferment by IRL management of the Ollachea development, and the dismissal of Benavides from his position. (Presumably on grounds of fermenting the local community unrest).
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