|
|  |
| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
 | |
| Project number | 21766 |
| Project name | Marlin |
| Country | Guatemala |
| Sector | Oil, Gas And Mining |
| Department | Oil, Gas, Mining And Chemicals |
| Company name | Montana Exploradora de Guatemala S.A. |
| Environmental category | A |
| Date SPI disclosed | March 24, 2004 |
| Projected board date | May 28, 2004 |
| Status | Completed |
| Previous Events | Invested: November 5, 2004
Signed: June 29, 2004
Approved: June 3, 2004 |
|
| Description of company and purpose of project |
The Marlin project (Marlin, the company or the project) is a promising greenfield gold project located in the western Guatemalan highlands approximately 90 air miles northwest of Guatemala City. The $254 million open pit/underground project is estimated to produce about 217,000 oz per annum over 11 years at about $93/oz cash cost (lowest quartile on the cost curve). Total open pit and underground reserves in the current mine plan are estimated 13.3 million tonnes at 5.4 g/t gold. In addition, there is significant exploration potential. The metallurgy appears simple and conducive to a simple treatment circuit with high recoveries.
The project is owned by Montana Exploradora de Guatemala, S.A. (ME), a 100% subsidiary of Glamis Gold Ltd. (Glamis or the sponsor), a mid tier gold producer listed on both the Toronto and New York Stock Exchanges. ME holds other exploration stage properties in Guatemala in addition to Marlin. |
|
| Project sponsor and major shareholders of project company |
Glamis Gold Limited, through Montana Exploradora de Guatemala, has a 100% interest in the Marlin project.
Glamis Gold Limited: a description of the sponsor is as follows:
Glamis is a Reno based mid-cap sized gold mining company listed on both Toronto and New York Stock Exchanges. Glamis currently produced 230,000 ounces in 2003 at a cash cost of $184/oz from its operations in Honduras and Nevada. The company has a stated medium term goal of achieving gold production of 500,000 oz/yr at less than US$150/oz. In addition to Marlin, Glamis holds additional concessions (both through and outside Montana Exploradora) in Guatemala.
As of March 5, 2004 Glamis had a market cap of $2.15 billion at $16.6 per share. |
|
| Total project cost and proposed IFC investment |
The project cost for Marlin is estimated at $254 million, including $123 million capital costs and $131 million that Glamis spent to acquire and develop the project to feasibility stage. IFC is providing ME a loan of $45 million, for Marlin’s development. Glamis will finance the remaining capital costs through shareholders’ equity and loans.
|
|
| Location of project and description of site |
| The Marlin project is located near the village of San Miguel in western Guatemala. San Miguel is located 30 kilometers south of Huehuetenango, a major town 250 kilometers northwest of Guatemala City along the Central American highway. The Marlin project is accessible by an all-season road, which is connected to a paved highway near Huehuetenango. |
|
| Project Development Impact and IFC's Role |
IFC Role:
Glamis wants IFC’s participation in Marlin first, to mitigate the political risk associated with working in Guatemala. Marlin is one of the first significant mining projects in Guatemala and as such the mining environment in Guatemala is virtually untested.
Second, Glamis is committed to achieving international best practice at Marlin and ensuring that project’s benefits outweigh the negative impacts. IFC can play a strong and positive role in the project by facilitating community partnerships, enhancing project’s environment and social management capacity and identifying and developing any potential SME linkages.
Development Impact
- Environmental Protection And Community Development:
ME has aligned with Citizen’s Development Corps (CDC), a Washington-based NGO, to develop and fund, with IFC’s assistance, Fundación Sierra Madre (FSM). The foundation’s specific mission is to plan and implement sustainable, community-based, development and capacity building programs in the municipalities of San Miguel Ixtahuacán and Sipacapa.
IFC will be providing both technical and financial assistance to FSM. Specifically, IFC’s Corporate Citizenship Facility (CCF) is coordinating with the FSM in the development of a program to establish community-managed nurseries to supply the mine's reforestation needs. CCF would supply funding for a consultant to provide TA to the communities in getting the nurseries up and running and possibly provide marketing assistance. In addition, as part of project supervision, IFC would assist FSM with monitoring and evaluation of its various programs.
This program would lay the groundwork for further IFC involvement including IFC SME assistance. The objective would be to not only create supplier linkages but also opportunities beyond the mine, thereby creating employment in the mine communities that should outlast eventual closure.
- Local Hiring and Skills Transfer:
Montana intends to train and hire as many local residents of surrounding communities as practical. Montana’s local hiring target is 80% of the operations workforce.
- Local Capacity Building and Infrastructure Improvements:
Through FSM, Montana will assist local governments and appropriate non-governmental organizations (NGO’s) in the development and improvement of community facilities and services, such as health care, schools, utilities and municipal management.
- Demonstration Impact:
Marlin will be one of the first mining investments in Guatemala in years. Its commercial success and its community programs should both provide a demonstration impact and help encourage new investment in the sector. |
|
| Environmental and social issues - Category A |
This is a category A project according to IFC’s Environmental and Social Review Procedure. Potential environmental, health and safety issues associated with this project include: associated facilities; longer-term cumulative impacts; natural habitats; international waterways; safety of tailings dam; solid and liquid waste management; hazardous materials management; water resources management; reclamation and closure; management of occupational health and safety issues, as well as emergency preparedness and response. Social issues include: management of impacts on indigenous communities; resettlement, compensation and sustainable economic rehabilitation/development; direct and induced impacts of associated facilities; induced migration to the project area; and management of work camps and residential areas.
To view the environmental documents for this project, click here |
|
| Location of environmental documents in locally affected community |
The environmental documentation will be made available at the following locations:
Montana Exploradora de Guatemala, S.A.
20 Calle 24-60 Zona 10
Ofi-Bodegas Pradera #20
Guatemala City, Guatemala
Marlin Project Office
Project Site
San Miguel Ixtahuacan
Departamento San Marcos
Guatemala
San Miguel Ixtahuacan Municipal Office
San Miguel Ixtahuacan
Departamento San Marcos
Guatemala
Fundacion Sierra Madre Office
San Miguel Ixtahuacan
Departamento San Marcos
Guatemala
Sipacapa Municipal Office
Sipacapa
Departamento San Marcos
Guatemala |
|
| To contact the project company, please write to: |
Mr. J. Michael Swetye, Principal Investment Officer
Oil, Gas, Mining and Chemicals Department F8K-254
International Finance Corporation
2121 Pennsylvania Avenue NW
Washington DC 20433
Email: Jswetye@ifc.org
Fax: 202-974-4323 |
|
|
|