• Raised $28 Million Financing - May 2008
• EIA submitted to GOP Apr 2008
• FFS completed Dec 2007
• 65,214M of core drilling in 286 holes
• National Instrument 43-101 compliant resource estimate
• Preliminary metallurgical testing
• Preliminary mine layout and open pit design
• Geotechnical, tailings and waste dump studies
• Environmental and social baseline studies

Peru Overview

JUNE 2008
From the Economist Intelligence Unit
Source: Country ViewsWire

Annual data	2007 (a)	Historical averages (%)	2003-07
Population (M)	28.8	Population growth	1.5
GDP (US$ bn; market exchange rate)	109.1(b)	Real GDP growth	6.4
GDP (US$ bn; purchasing power parity)	219.4(b)	Real domestic demand growth	7.1
GDP per head (US$; market exchange rate)	3,787	Inflation	2.3
GDP per head (US$; purchasing power parity)	7,615	Current-account balance (% of GDP)	0.8
Exchange rate (av) Ns:US$	3.128 (b)	FDI inflows (% of GDP)	3.3
(a) Economist Intelligence Unit estimates. (b) Actual.

Background: Following the resignation of the former president, Alberto Fujimori (1990-2000), after revelations of corruption, the president of Congress, Valentin Paniagua, became interim president in 2000. In 2001 Mr Paniagua oversaw free and fair presidential and congressional elections, and transferred power to Alejandro Toledo of Peru Posible, who had narrowly defeated Alan Garcia (1985-90) of the Alianza Popular Revolucionaria Americana (Apra). In 2006 Mr Garcia won the presidency for the second time, defeating Ollanta Humala of the Union por el Peru (UPP).

Policy issues: Mr Garcia has inherited a tough challenge: to rebuild the credibility of democratic institutions, maintain stability and growth, and reduce widespread poverty. He has a weak congressional position, however, which may hinder his ability to push through legislation. His economic programme maintains his predecessor's orthodox economic policy direction, while attempting to reduce Peru's critical poverty levels through public investment and increased social expenditure. The public education and healthcare systems are underperforming. The government will continue to target investment in transport, energy and water infrastructure. A bilateral free-trade agreement (FTA) with the US, finalised in December 2007, will boost investment and trade flows between the two countries.

Taxation: The corporate income tax rate is 30% for distributed earnings and 27% for reinvested earnings. Branch profit tax is levied at 30% and remittance tax at 10%. Royalties are taxed at 30% and interest is paid abroad at 5%. Value-added tax (VAT) is 19%. A tax on financial transactions, which was introduced in 2004 at a rate of 0.08%, was reduced to 0.05% in March 2007; it will stay in place until at least the end of 2011.

Foreign Trade:Tariffs are levied on imports, at 9%, 17% and 20%; 48.5% of all imports enter the country duty-free, giving an average tariff of 5.8%. Most non-tariff barriers to trade have been eliminated. In 2007 merchandise exports totalled US$29bn and imports US$19.6bn.