Instead, the mine will bring desperately needed jobs and investment to the region, he said.

Glaser told Reuters this week during a visit to Lima that the Tambogrande mine, to be located about 1,050 kilometers north of Lima in a valley that produces 40 percent of Peru's mangoes and limes, could be up and running by late 2004, provided the people back the plan.

In June, Tambogrande residents turned out in force for an informal vote on the project in which 99 percent of voters gave it the "thumbs down."

But 27 percent of eligible voters did not take part in the vote, which Manhattan Minerals denounced as flawed.

A POLITICAL HOT POTATO

The case is politically charged because mineral-rich Peru desperately needs foreign investment to create jobs and boost prosperity.

But mining has a bad environmental reputation. And Tambogrande is one of the Andean nation's prime farming areas.

"I think a great deal of the difficulty with the community in Tambogrande had to do with the fact there was misinformation and misunderstanding related to water consumption, water disposal and concerns about the agriculture sector," Glaser said.

He said the mine would not in fact use water earmarked for agriculture, or from the fertile, farm-rich San Lorenzo valley, and would be a "zero discharge facility."

"I believe that as factual information - derived from independent consultants - is distributed ... they can see that there isn't environmental damage," he added.

Manhattan Minerals presented its environmental impact study - which took three years to compile and cost about $2 million in the last 18 months alone - to Peru's government on Monday.

Its findings will be discussed in the new year with local residents in what Glaser anticipated would be at least 10 public meetings.

"Now it is time to demonstrate to the population that we are responsive to their issues," he said.

JOBS, INVESTMENT, OUTPUT IN 2004

According to Manhattan Minerals' latest plans, capital investment will be $405 million - higher than initial investment forecasts of $315 million. That includes mine construction, the cost of relocating the residents of around 1,800 homes that lie in the path of the open-cast mine, social projects and a $140 million effort to mine the copper underlying the gold.

Manhattan Minerals, whose option on the project expires on May 30, 2003, sees up to 3,000 jobs from building the mine. Operating it will employ 350 directly and up to 1,750 indirectly.

Manhattan Minerals operated a gold mine in Mexico until reserves ran out two years ago.

Tambogrande is the Canadian company's only current project.

It expects operating costs of $526 million during the 17-year life of the project to pay royalties of $229 million.

"I think we'd be actually producing by the end of 2004, but I don't want to jump the gun on that," Glaser said. "That's assuming we have successfully reached the goals in the environmental impact study and (have reached) consensus.

"At the end of the day this mine will not be built unless there is a consensus of opinion in favor of the project."

Glaser said residents in line for relocation were among the mine's staunchest supporters since they stood to gain modern new homes with facilities unavailable in some parts of Tambogrande. Manhattan Minerals estimates only 15 percent of the town's homes have electricity, water, sewage and paved streets.

To sweeten the deal for farmers, Glaser said the 25 percent of the mine that would remain in the hands of the Peruvian government should be transferred to local municipalities.