Approximately 30% of my portfolio is invested in mines in Peru. I have done a fair amount of research in this area. Have a look at this article related to BCM.V from June 27, 2011 (I own shares in this company). I think it is important in order to get an understanding of the turmoil that is currently going on in Peru.

Peru mine dispute hammers Bear Creek shares

http://www.theglobeandmail.com/globe-investor/peru-mine-dispute-hammers-bear-creek-shares/article2076868/

"Investors panicked after Peru said the recently approved Santa Ana project was no longer in the public’s “best interest” in the aftermath of anti-mining protests that recently turned deadly."

"Vancouver-based Bear Creak said it is launching legal action against Peru, arguing that nothing has changed with the project since it passed all the requirements necessary to operate in the country."

Another article from June 27:

Bear Creek fights back in Peru mine dispute

http://www.cbc.ca/news/business/story/2011/06/27/bear-creek-peru.html

"Bear Creek has already spent $96 million on the project. The license was originally granted in 2007 and the mine was set to be operational in 2012. Bear Creek says the mine will produce 47-million ounces of silver a year throughout the mine's 11-year lifespan."

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Newmont Mining Corp and Buenaventura's joint venture (I do not own any shares of these companies) are getting hit the hardest. Their Conga mine, a $5 billion gold and copper project in the heart of Cajamarca is facing intense local opposition. Cajamarca is located in Northern Peru. Northern and Southern Peru have faced the most opposition (Santa Ana is southern Peru). The Peruvian government is seemingly doing all they can to get the Conga mine going. They are working on getting the environmental study reevaluated. BCM's Santa Ana takes a backseat as a result, very small compared to the Conga mine.

From wikipedia:

"Mining: Peru ranks fifth worldwide in gold production (first in Latin America), second in copper, and is among the top 5 producers of lead and zinc. Manufacturing: Peru has developed a medium manufacturing sector. The sector now represents 23 percent of GDP and is tied heavily to mining..." Another site I looked at indicated 5% of their GDP relates to just mining.

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Quellaveco is in Southern Peru. They could easily get the rug pulled up from under them just as BCM.V did with their Santa Ana mine.

Here is an old article related to Quellaveco from July 29, 2011:

Anglo American pushes back Quellaveco approval to 2012

http://www.bnamericas.com/news/mining/anglo-american-pushes-back-quellaveco-approval-to-2012

"The project has faced several delays as a result of opposition from residents in Moquegua concerned about water use."

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So why post all of this? While I remain optimistic about the future outlook of mining companies in Peru, the short term is very ugly. The fact that Quellaveco gets this high of an offer with the current conditions in Peru is astounding to me. This is all perfect timing for CUU as well. They must look like rockstars in Whistler right now.

By the way, SRD.V is another company that Teck has an opt in agreement with and they are located in Peru