The first private placement by a junior mining company in Peru since the integration of Lima stock exchange BVL with those of Colombia (BVC) and Chile (BCS) shows there is considerable potential for financing in 2011, the managing director of corporate finance at Lima-based Kallpa Securities, Ricardo Carrion, told BNamericas.

Calgary-based Rio Alto Mining (TSX-V, Lima: RIO; Pink Sheets: RIOAF) closed a private placement last week to raise funds for its La Arena gold-copper project in Peru, with Kallpa as agent.

The company raised gross proceeds of Cdn$20.3mn (US$20.2mn) through the sale of approximately 12.1mn shares at Cdn$1.68 each in three tranches. The operation exceeded the anticipated maximum of Cdn$20mn due to strong market demand.

“It was much better than what we expected for the first time,” Carrion said. “There was a lot of interest from investors, especially institutional investors. They see a good opportunity and they are starting to learn more about what junior mining means for an investor.”

The placement was the first Kallpa had undertaken since the integration of the three stock exchanges, known as Mercado Integrado Latinoamericano (MILA). The operation included about US$10mn from Chile.

“My impression is that for the next placement we will use not only Chile but the Colombian market as well, so the placement will be much bigger,” he added.

Kallpa is currently sponsoring 11 exploration companies. In the last 13 months, the brokerage has raised around US$40mn in total. If metal prices hold steady or increase, Kallpa expects to raise two or three times more than that in 2011, according to Carrion.

“We’ve been talking to at least three companies that are interested in doing large placements here in Peru,” he said.

The first stage of MILA began on November 22 and direct trading is scheduled to start in January 2011. The operation will be Latin America’s largest in terms of listed firms and the second biggest for market capitalization.

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