(Adds reaction from Shahuindo managers)
By Mitra Taj
LIMA, May 27 (Reuters) - A 17-year-old boy and a 21-year-old man working in an illegal gold mine in Peru near Tahoe Resources Inc's Shahuindo project died after inhaling noxious fumes 500 feet underground, a public prosecutor said on Wednesday.
The two died in a tunnel in the illegal gold mining hub known as La Chilca on the Shahuindo concession in the northern region of Cajamarca, said public prosecutor Miguel Angel Carmona.
"Illegal miners have practically usurped the land there to extract ore," said Carmona.
Shahuindo managers in Peru said that at least 16 miners have died in similar incidents since illegal "wildcat" miners first encroached on its concession to set up La Chilca in December 2008.
"We've asked and are asking authorities to shut down these illegal operations," said Shahuindo general manager Javier Fernandez-Concha.
Fernandez-Concha added that La Chilca is far from key parts of the Shahuindo deposit and is not expected to affect the mine's construction or future output.
Shahuindo was acquired by Tahoe Resources in February.
The gold project is scheduled to start production in January 2016. Annual output is estimated at 90,000 ounces.
Peruvian authorities have been unable to control illegal gold mining, which employs tens of thousands of people across Peru and has been linked with child labor, prostitution, human trafficking and pollution.
Illegal gold mines the Peruvian Amazon have destroyed large swaths of rainforest and dumped tonnes of mercury in rivers.
A bid to formalize wildcat miners has faced years of delays.
Reporting by Mitra Taj; Editing by Dan Grebler and Cynthia Osterman