Toronto-based Andina Minerals (TSX-V: ADM) aims to create a community to group together water rights holders in northern Chile, VP of projects Alejandro Labbé told BNamericas.
"The water community aims to ensure a planned and sustainable use of the water, which is a key issue in northern Chile due to its scarcity," Labbé said on the sidelines of the fourth international exploration forum organized by Chile's copper and mining study center Cesco.
"The legal process of creating the community is almost done. We are expecting a court ruling granting us legal recognition shortly."
The company began the project on the recommendation of local water authority DGA, according to the executive.
"This will be a pioneer initiative that I think will set parameters for future water use planning in Chile," Labbé added.
Andina Minerals will soon start working on an EIS for its 100%-owned Volcán project in the Maricunga gold belt, which will be submitted to the environment ministry's (MMA) evaluation service (SEA) by 2Q12.
"Construction has been set to start during the second quarter of 2013 and to be completed by the first quarter of 2015," Labbé said.
Water for the project will come from rights owned by the company that total 270l/s. "However, water consumption at the project will not be more than 130l/s," Labbé said.
Volcán's capital costs have been estimated at US$551mn for an open pit operation with estimated average output of approximately 283,000oz/y during a mine life of 15 years, according to the study.