29492 - Argentex

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Environmental & Social Review Summary

Project Number

29492

Company Name

Argentex Mining Corporation

Date ESRS Disclosed

May 28, 2010

Country

Argentina

Region

Latin America and the Caribbean

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 29, 2010
Signed : Sep 24, 2010
Invested : Oct 21, 2010

Sector

Silver

Industry

Metals and Mining

Department

Infra-WBG Dir. Minerals & Metals

Project Description

Mineral Resources: Argentex acquired the Pinguino property in 2004 and has carried out more than 30,000 meters of diamond drilling to date (269 holes) and mapped out more than 74km of veins. Pinguino is today a medium sized polymetallic discovery, but it has significant additional resource potential within the license area. The mineralization is contained in multiple zones that remain open along strike and at depth. The 2010 drilling program (15,000 meters) that is currently underway and will cover an area as large as the one drilled to date, will focus on new targets and expansion of existing veins.
Pinguino enjoys favorable location close to existing infrastructure. An existing system of all-weather roads provides year-round access to the property, linking to two major highways (22km), existing mining infrastructure, and major port facilities.
Licenses: Argentex’s licenses to explore the Pinguino project have been issued in line with applicable environmental Argentinean legislation.

Overview of IFC's Scope of Review

The review of this company consisted of appraising technical, environmental, health, safety and social information submitted by the company, and assessing the company’s operations through a field visit conducted by the IFC environmental specialist to the largest of the company’s active exploration projects. The visit was conducted to the Pinguino exploration site in January 2010, where meetings were held with field personnel.

E & S Project Categorization and Applicable Standard

While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the project will have impacts which must be managed in a manner consistent with the following Performance Standards:

PS1: Social and Environmental Assessment and Management Systems
PS2: Labor and Working Conditions
PS3: Pollution Prevention and Abatement
PS4: Community Health, Safety and Security
PS5: Land Acquisition and Involuntary Resettlement
PS8: Cultural Heritage

The Pinguino project is in its early stages and the only current activities are exploration drilling. With positive results, Argentex will commission the necessary pre-feasibility and feasibility studies to support the project in moving forward into development. Whilst the area is not densely populated, initial environmental assessment have indicated no endangered species and therefore PS 6 is not triggered. The project site is not located in or nearby indigenous communities, thus PS7 is not applicable to the project.

Though no sites of archaeological or cultural significance are known, archaeological surveys have not been completed. Under Argentine law at the stage of its current exploration activities, the company has not been required to commission formal archaeological assessments. However, since fossils of importance have been found in areas not distant from the Pinguino sites, Performance Standard 8: Cultural Heritage applies.

Environmental Health & Safety (EHS) Guidelines that are expected to be applicable to this investment as the exploration project advances toward mining include:

General EHS Guidelines (April 2007), and
Mining EHS Guidelines (December 2007).

This is a Category B project according to IFC’s procedures for Environmental and Social Review of Projects because the project only involves exploration and therefore has limited adverse impacts and risks which are manageable.

IFC’s appraisal of this potential investment has identified the following environmental, social, health and safety issues as well as potential issues if and when mine development commences:

Management of exploration activities – Control of erosion and rehabilitation of drill roads, drill sites, safe disposal of oils, waste, etc.
Social issues - Management of community relations and expectations through on-going consultation and disclosure.
Potential future impacts (if Argentex’s prospects are developed into mines) typical of those associated with open pit and underground mining – community impacts, land acquisition, waste management, surface and groundwater protection, health & safety, hazardous materials exposure and management, emergency preparedness & response.

Environmental and Social Mitigation Measures

PS1: Social and Environmental Assessment and Management Systems

Social and environmental assessment:
The Company’s strategy is to cost-efficiently increase the resource estimate during 2010, after which given positive results hopes to advance to Pre-feasibility Study (PFS).

For the exploration phase, the Company has developed and is implementing a draft Environmental and Social Policy, which adequately addresses the impacts identified for this stage of the project. The Company has agreed to work with IFC to formalize its existing draft policies into a full Health, Safety, Environment and Community (“HSEC”) Policy that would be consistent with other early stage exploration investments made by IFC (Action Plan #1), as well as commensurate with the geographical, community, and environmental isolation of the project.

Argentex conducted initial environmental assessments in accordance with national requirements prior to commencement of drilling at the Pinguino site. Once the project footprint is confirmed, the ESIA additional work is planned to complete the environmental baseline and undertake full social baseline studies at the site.

The ESIAs for the project site for mine development will comply with the IFC Environmental and Social Performance Standards and with Argentinean environmental regulations. IFC will assist Argentex developing the TOR as needed to ensure that the IFC’s requirements are adequately addressed.

Management systems and training:
Whilst Argentex has commenced baseline data collection, it does not yet have a formalized E&S Policy or E&S management system. As Argentex’s operations grow management systems for all aspects of their operations will need to be developed and/or upgraded. During appraisal, IFC recommended Argentex develop and implement a Health, Safety, Environment & Community Policy, similar to those prepared by IFC’s other early-equity exploration projects. Argentex committed to this and a draft HSEC Policy has been prepared and will be finalized prior to equity subscription (Action Plan Item #1). The HSEC Policy can help form the basis of a framework ESMS which will be developed at ESIA stage.

Organization:
As the present time, exploration is conducted on the property only seasonally on a campaign basis when programs are active. As an exploration company, Argentex is currently relying mainly on the geologists for environmental support services. Argentex anticipates building its environmental and social capacity as the project develops further and engineering studies and economic evaluations move the project forward.

Environmental and Social Policy:
The Company has committed to implementing an HSEC Policy acceptable to IFC. The policy will adhere to all applicable in-country environmental legislation, as well as incorporating the requirements of IFC’s Performance Standards.

Monitoring:
As described above, initial environmental assessment has been undertaken at the site and daily visits to the drilling area are conducted by the geological team as well as by personnel from Major Drilling, the drilling contractor, to ascertain compliance with the environmental, health, and safety aspects related to the drilling operations. Argentex will, with the assistance of IFC provide input to developing the format of the Annual Monitoring Report and submit a copy to IFC on an annual basis [Action Plan Item #6].

Reporting:
Argentex does not currently publically report on the environmental and social aspects of their operations. Argentex will provide an Annual Monitoring Report to IFC detailing environmental and social progress, incidents and monitoring, as appropriate (Action Plan Item # 7). Currently the Company is engaging with the local communities at a scale appropriate to its early stage and seasonal exploration.

PS2: Labor and Working Conditions

Human Resources (HR): The Company will develop a human resource policy in line with IFC requirements, which outlines the rights and obligations of workers (Action Plan Item #4).

The total workforce of the company during drilling campaigns is around 20 people of which 13 are drilling contractors. The drilling company has extensive environmental and social policies and procedures which are enforced through the legal contract between Argentex and the drilling company.

Workers’ Organization:
Workers are currently not organized in unions. The company does not take any measures to prevent the establishment workers’ organization, which will be emphasized in the HR policy (Action Plan Item #1).

Non-Discrimination and Equal Opportunity:
Argentex will include an explicit non-discrimination and equal opportunity requirements within their overall HR and HSEC Policies which are being prepared (Action Plan Item #1).

Occupational Health and Safety (OHS):
Currently there is no formal Occupational Health and Safety (OHS) management system or incident reporting / environmental incident reporting system. Argentex has committed to implement such systems (Action Plan Item #1).

Terms and Conditions of Service and Grievance Mechanism:
There is currently no formal grievance mechanism for employees in place but the company has committed to development and implementation of an appropriate grievance mechanism system (Action Plan Item #4).

Argentex provides all workers with written contracts and monthly pay slips. Pay slips specify payments, accumulated holidays and deductions for social security. Some workers are employees and others, like geological students, are temporary workers that will go back to school so below a certain threshold of time, they do not require a contract. All workers are paid well above the minimum wage and are eligible for social security and free public health care as is standard for all workers in Argentina.

PS3: Pollution Prevention and Abatement

Waste Management System:
Argentex generates minimal amounts of waste which is all segregated appropriately. The Company responsibly manages waste streams and the final disposal methods. The main solid waste includes domestic and office waste and sewage. All wastes requiring disposal are disposed of by a contractor to the municipal disposal site in Pico Truncado. A septic field from the original estancia where the camp is located is being used as well as a septic settling tank for handling sewerage as the camp is a temporary one. A septic tank pumping service is being contemplated if project demands increase or a more permanent establishment is created.

Drill Site Rehabilitation:
During drilling campaigns topsoil is cleared from working areas and used for rehabilitation purposes as part of drill-hole closures. All rubbish and waste oils are removed from drill pad areas which are then ploughed and re-planted as appropriate.

Liquid Waste:
Includes mainly sewage effluent at the main exploration camps, storm-water runoff, and minimal amounts of used oil, grease, lubricants and drilling fluids from drilling activities (these are recycled to the supplier).

Energy use:
Power for the camp is supplied from a small generator. Fuel for the generator is currently stored in containers located in a bounded area. The only other emission sources are the small fleet of approximately four light vehicles which are used to access the property, in addition to the larger trucks which are used to transport the drill and ancillary equipment/supplies to and from the project at the start/end of the exploration program.

Water Quality and Use:
Water is provided by cistern for use in the exploration camps. The site is located in an arid area, but indications are that the operations will not place a strain on local water resources. The Company will proactively manage the issue through the ESIA process (Action Plan Item #3).

Emergency Response and Preparedness Plan:
Argentex has not yet developed its own Emergency Response Plan or Procedures (ERP), however, this will be included in the HSEC Policy noted above (Action Plan Item #1). The primary drill contractor and primary supplier of the camp work force, Major Drilling has its own ERP.

PS4: Community Health, Safety and Security

Neighboring Communities:
The neighboring communities are exposed to limited health, safety and security risks from the project. The main risks are related to transportation to and from the site. Even though the company has not yet formalized road safety procedures they do provide verbal instructions to cam personnel about speed limits. The nearest community is located approximately 50 km away from the project site. The current camp is located at an abandoned estancia for which Argentex reached a written agreement with the surface rights holder. Driving distances within the project itself are small.

Security Personnel Requirements:
Argentex does not hire any private security personnel nor is any support obtained from the armed forces of Argentina. Given the remote nature of the side outside the normal exploration season, and the fact that all of the equipment and material are removed from the site when the drilling season is finished, there is generally no need for camp and site security. Argentex will implement security policies and procedures commensurate to the risks in line with IFC’s requirement when transiting to mine development.

Emergency Preparedness and Response Plan
Argentex does not have its own Emergency, Preparedness and Response Plan (ERP). However, Argentex are committed to developing one as part of their stakeholder engagement plan (Action Plan Item #2). The primary drill contractor, Major Drilling, and the largest work force on the project has an ERP.

PS5: Involuntary Resettlement

The company has negotiated right-of-way with owners of the abandoned ‘Estancias’ (farm houses) for the drilling campaigns. In addition, Argentex is in the process of acquiring land from some of the absentee land owners. All land acquisition will be conducted in line with the requirements of PS5 (Action Plan #2).

PS8: Cultural Property

As part of the baseline studies, archaeological studies will be undertaken; currently no significant archeological sites have been identified. Further studies will be undertaken as part of the ESIA. Argentex will develop a chance find procedure establishing the protocol if any cultural artifacts are identified (Action Plan Item #5).

Stakeholder Engagement

The Pinguino project is located in an arid area with no human settlement. The area has historically been used for herding sheep but this activity was not financially and environmentally sustainable and ceased in 1947. Within the general region, the volcanic eruption in 1991 was probably the definable end of the sheep ranching industry. There are still some abandoned farm houses ‘estancias’ on the concession area. The owners of the ‘estancias’ live in other cities but receive compensation from Argentex for access to water and land, as well as for surface disturbances for early stage exploration such as trenching, drilling and road building.

The nearest community is located more than 50 kilometers away from the concession area (Campamento Yacimiento Cerro Vanguardia). In 2004, Argentex already initiated contact to the community Puerto San Julian located 140 km from the concession area. Recently, the warehouse was moved to Pico Truncado and interaction with the communities there has been initiated. Argentex has full time presence in the community through their warehouse technicians who work and live in the community on a rotational basis. Most interactions with communities have been of an informal nature. Moving forward, Argentex plans to consult with these and other communities in the area to ensure that people are aware of the project development as well as to inform them about job opportunities in the event that project development moves forward. Argentex will develop a stakeholder engagement plan commensurate to the impacts of their project activities (Action Plan #2).

Client Documentation

File Name	Actions
Argentex - ESAP. docx.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

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