The project sponsor is Antares Minerals Inc., a listed (TSX V.ANM) junior mining exploration company incorporated in Canada and with offices in Waterdown (Toronto area - Canada) and Arequipa (Peru). The largest shareholders are Farallon Capital Management (38%) and Front Street Capital (5.9%).

The total project cost from March 2009 up until completion of pre-feasibility study for the upper secondary copper mineralization during mid 2010 is estimated at approximately $15 million. The proposed IFC investment is an equity investment of $5 million coupled with a warrants package.

12.26 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	12.26

* These investment figures are indicative

The Haquira project is located approximately 80 km to the southwest of Cusco, Peru in Apurimac Department of Peru. The property is in the Andes at elevations of 3,500 to 4,400 meters and consists of treeless, gently rolling hills with grassy vegetation and some rocky ridges. The property is a greenfield site. Access is by paved and unpaved roads, with driving time of seven hours from Cusco and twelve hours from Arequipa.

The Project is located in a remote region in the rural area of the Andes highlands with very limited employment opportunities other than sheep grazing. During the exploration phase, in addition to generating direct employment, the Company is implementing a program to improve local livelihoods through training and provision of materials for fish farming, greenhouse cultivation of vegetables, farming of fodder, sowing and occupational training. The Project is expected to have limited development impacts during exploration phase, but potentially significant economic development impacts during construction and production phases, including tax revenues/foreign exchange contribution to the national economy, contribution to the local government budgets, as well as potential development of transportation and energy infrastructure that will improve possibilities for other economic activities.

IFC’s contribution during the pre-project development phase includes: Capital: Up to $5 million equity investment now and potentially further funding if the project were to move to feasibility study stage and project development. Junior mining companies have been hit hard by the current financial crisis and IFC has an important countercyclical role to help Antares raise the financing necessary to continue its exploration program. In addition, IFC’s investment would serve as a strong indicator to investors that if the Project proceeds to the mine development phase, IFC could potentially provide project financing alongside other investors. IFC Input to Environmental and Social Studies and Practices: IFC environmental and social specialists will engage with the Company to provide input and guidance to ensure that Antares’ environmental and social studies and practices are in line with IFC Performance Standards. In the event a mine gets developed in the future, IFC expects to contribute in various ways: IFC Royalty/Taxes Management Program: IFC has implemented a royalty/taxes municipal management program in other parts of Peru, and a similar program could be implemented in the Project area. SME Linkages: Depending on the scale of the project, there could be opportunities for engagement from IFC's Linkages program, which would help maximize local benefits. Project Financing: After completion of the pre-development phase and before moving to the project development stage, IFC would consider other ways to continue financial support to the Company.

This is a Category “B” project according to IFC’s Environmental and Social Review Procedure. The potential environmental impacts associated with this investment, which covers the completion of the exploration phase and feasibility study activities, are related to management of sampling and drilling sites, erosion and rehabilitation of temporary roads, management of water resources, waste management; water management; public safety, dust control, hazardous materials management and mitigation of transportation risks on roads leading to the site. Social issues include temporary land access (and compensation for temporary loss of agricultural land), consultation with stakeholders while managing expectations, management of the exploration camp and its workforce and influx management. All of these impacts are limited, site-specific, almost completely reversible and readily addressed through mitigation measures and careful management.
For this exploration phase, Antares is working with IFC to formalize its existing draft Policies into a full Health, Safety, Environment & Community (“HSEC”) Policy. In addition, Antares commissioned a Phase I baseline assessment which included air and water quality, bio-diveristy, archaeology and noise. There has been significant consultation with the key communities, and it is apparent that a future mining project would enjoy broad support. Full assessment of impacts, consultation and disclosure will take place prior to any potential mine development through a full Environmental and Social Impact Assessment (“ESIA”).
The Haquira Project concessions encompass 18 Rural Andean Communities (“RAC’s”) of which three are directly impacted at the current stage of operations. Communal land ownership and community use of natural resources (e.g. pasture lands), and traditional decision-making arrangements are common in RACs. The RACs within the concession are poor, vulnerable, and dependent on subsistence small-scale farming, herding, and grazing and some limited wage labor related to the exploration activities. They have limited access to social services, roads, and markets. Antares will continue to work closely with these communities undertaking consultation to ensure that Broad Support is maintained. Antares will also work within the provisions of Performance Standard 7 as appropriate and in accordance with the wishes of the communities.

For a junior exploration company at this stage of development, Antares has developed an impressive community program which includes 17 small capacity building projects. No resettlement is being undertaken for this project, and although small areas of pastoral land are temporarily set aside for exploration, this temporary economic displacement does not result in any significant adverse impacts in terms of the communities’ livelihoods. Antares obtains the authorization from the communities to use this land and has developed a negotiation protocol, which includes the provision of an in-kind compensation chosen by the community, usually related to the improvement of agricultural practices or animal husbandry.

A part of the benefit of the potential future mine development would come in the form of taxes and royalties that would be paid to government (part of which will be distributed at the local level). The IFC has considered the risks to these benefits and, given its assessment of the Government capacity to effectively use these revenues (including the potential for engagement in programs at the municipal level), believes that on balance this is a project it should support. Peru is a member of the Extractive Industries Transparency Initiative (“EITI”) and has begun the implementation process. Peru already discloses tax and royalty payments paid to Government from the oil, natural gas and mining sectors. Antares has agreed to specifically disclose all its payments (royalties, taxes) paid to Government, both at central and regional/local levels. Mining concessions are publicly available for review, further enhancing the transparency of the mining sector in Peru.