Plans for the project are based on Hidropesac’s updated feasibility study on the construction of a hydroelectric power plant using the water resources of the Pelagatos and Plata rivers. Hidropesac has a temporary concession permit and is presently updating the environmental assessment and archeological artefacts study. When those studies are finished, it will then complete the generation and transmission technical specification, a feasibility study for the electromechanical equipment, engineering for the civil and electromechanical works, and engineering for the substations and transmission line in order to obtain the permanent concession.

Malaga expects to obtain final approval early in the fourth quarter of 2012, which would allow building to begin the following quarter. Construction is expected to take 18 to 24 months, followed by a six-month commissioning period.

While initial capacity of the project is expected to be 20MW, given the area’s watershed and water flow characteristics, as well as enhanced dam retention capacity, potential capacity could subsequently be increased up to 38MW.

“Tungsten concentrate at the Pasto Bueno mine is currently produced using a gravimetric process that’s powered by a 600kW feed from a hydroelectric plant (about 70% of the power requirements) built by Hidropesac in 2007,” said Pierre Monet, President and Chief Executive Officer of Malaga. “Given the access to the large rivers on the property, we are now planning an expansion that would enable us not only to meet our long-term power requirements, estimated at 3-4MW, but also sell surplus power to private users or the Peruvian national power grid.”