Canadian mining company Manhattan Minerals Corp. has spent $58 million since 1999 exploring the fertile Tambogrande valley, 640 miles (1,050 km) north of Lima, which produces 40 percent of Peru's mangoes and limes.

"It's an important reserve to be exploited," Danino said. Peru is Latin America's leading gold producer and ranks No. 5 worldwide in copper output.

While Manhattan denies some townspeople's allegations the that project could destroy Tambogrande's farm industry and hurt the environment, some 99 percent of voters who turned out for a nonbinding June 2 referendum voted against the mine.

Mining has a bittersweet legacy in Peru. The industry is the top foreign currency earner but the poor nation bears the environmental scars of decades of big mining deals.

The government of President Alejandro Toledo, which is seeking to lure desperately needed foreign investment in projects like this one, has not recognized that vote.

"We have said clearly that this was an invalid vote that didn't give people enough information to make an informed decision," Danino said. Manhattan, meanwhile, accused international nongovernmental groups of manipulating local public opinion, a claim local officials deny.

The company says it will use only fail-safe mining techniques and promises the project will create 1,850 new jobs. They also say they will offer new homes and other incentives to about 2,000 people now living on top of what it wants to see as a 2.7-square-mile (700-hectare) mining area.

Danino said there needs to be an information campaign to explain to farmers the project's advantages and disadvantages.

"We're talking about serious talks that will allow people to analyze whether mining is going to improve their quality of life, allow them to join the modern world, give them prosperity," he said.

But local officials have been skeptical and are urging the government to respect the referendum.

"Tambogrande will bring almost no benefits (for locals).... Every project like this one must be accompanied by a local development plan and environmental protection," Tambogrande Mayor Alfredo Rengifo told Canal N cable television.

"We will be waiting and watchful to see that public opinion is respected," he said.