* COO says Rio Alto to graduate to TSX later this yr
* Company to start study on project’s sulphide part in May
* Study expected to increase resource (Adds details from interview, background)
By Euan Rocha
TORONTO, March 6 (Reuters) - Rio Alto Mining RIO.V expects the first gold production from its La Arena project in Peru by the end of April, and the exploration company is working on expanding the size and scope of its project.
The project, which has oxide and sulphide components to the deposit, has a little more than 4 million ounces in gold resources in all categories. It also has a copper resource of 2.9 billion pounds.
The initial gold production will come from the oxide portion, which is expected to produce about 75,000 ounces of in the first year. The oxide deposit is expected to produce 100,000 ounces of gold annually thereafter over six years.
"We are now very close to having everything completed in preparation for our first bar of gold," said Chief Operating Officer Alex Black said on Sunday. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For more stories on PDAC convention: [ID:nN02153893] For a graphic on copper prices: r.reuters.com/baw38r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Black was speaking on the sidelines of the annual PDAC mining convention in Toronto. The event brings together hundreds of exploration companies and their larger counterparts from across the globe. It is expected to attract more than 20,000 delegates this year, as metals prices are on a tear and the mood in the industry is bullish.
Gold rose above $1,430 an ounce last week, as widening clashes in Libya prompted investors to pile into safe havens. Bullion recently hit a record high of $1,440.10 an ounce on fears that the unrest could spread across the Arab world.
The company plans to start a feasibility study on the sulphide portion of the deposit in May. It will complete the study by the end of 2012, said Black.
He expects the study to increase the size of the resource and improve the economics of the project, which is located east of Barrick Gold’s (ABX.TO) Lagunas Norte mine.
“I‘m sure there’s plenty of people who type in Rio in the Canadian market, who expect to see Rio Tinto and they see us, so that’s pretty good, I think -- that was a coup,” he said.
The tiny exploration company’s stock performance though is no laughing matter. Its shares rose 600 percent in 2010 and the company was among the top performing stocks on the TSX Venture Exchange. It was also the best performing stock on the Lima Exchange RIO.LM.
Black said the company will graduate to the Toronto Stock Exchange from the junior exchange this year.
“We are working on re-shaping our board in preparation for a move to the main board,” he said.
Black sees the company being a mid-tier gold and copper producer in five years if it doesn’t get bought out before that.
“There are people starting to contact us and wanting to talk. We are open to it - we are shareholders too,” he said, adding that the company’s management group owns a roughly 9 percent stake in the company.
Gold miner Iamgold IMG.TO also owns a roughly 6 percent stake in the company, said Black, who expects Rio Alto’s share price to continue to outperform.
“This story is going to really evolve. Just as we’ve gone from a 20 Canadian cent stock 18 months ago to a C$2.30 stock today, I still think we’ve got the ability to go from C$2.30 to a much higher number over the next 12 to 24 months.” (Reporting by Euan Rocha; Editing by Frank McGurty)