Announcement of IFC Lending to Assist Peruvian Gold Mining Project December 11, 1985

International Finance Corporation _ 03 FOR RELEASE: Wednesday, December 11, 1985 CONTACT: Don Roessner Press Release No. 86/19 (202) 676-0394 IFC LENDS $3.3 MILLION TO ASSIST PERUVIAN GOLD MINING PROJECT The International Finance Corporation (IFC) is making its seventh investment in Peru's mining sector by helping to finance a $10.6 million project to expand production and improve efficiency of a privately owned gold mining operation in the eastern Andes, north of Lima. IFC is a World Bank affiliate and the leading international organization supporting the economic growth of developing countries by assisting their private sectors. It has previously approved investments in copper, silver, tungsten and zinc projects in Peru as well as enterprises in other sectors such as cement and building materials, fertilizer, electric power and capital markets. The IFC investment is being made in Compania Minera Poderosa S.A. and consists of a $3.0 million loan and a $300,000 convertible loan. The local sponsors of Poderosa are investing $2.6 million in the project. Additional long-term debt of $4.0 million and internal cash generation complete the financial plan. The project will expand Poderosa's ore treatment capacity from 130 metric tons a day at present to 250 tons -- increasing gold production from 17,200 ounces to 31,200 ounces a year by 1987. It will also lower unit operating costs by reducing bottlenecks and includes further development of the existing mine and the opening of three other mines. The expansion will generate estimated net foreign exchange earnings of $8.6 million annually and benefit one of Peru's more remote areas by providing roadways, an airstrip, medical facilities, a school, water supply services, electrical power and other needed infrastructure.