Peru climbs rapidly up the ranks of the world gold producers

Engineering and Mining Journal, Apr 2000 by Albareda, Guillermo

MANY PROJECTS

More than 100 gold projects and prospects under study have been currently identified by foreign and local companies, all of which seem to indicate that Peru's gold production will surpass 150 mt in the near future.

a) Projects with reserves seeing construction or production:

La Quinua. Located in Cajamarca, this is the fifth mine owned by Minera Yanacocha (Newmont and Buenaventura)> and will commence producing in the year 2002. An investment of around $80M has been estimated, which includes both the construction and equipping of a leaching pad. It has reserves of approximately 5M oz of gold in oxides.

Selene. These gold-silver projects located in Andahuaylas, Apurimac, belong to the Grupo Hochschild and have high-grade gold veins.

Antapite. This is a high-grade gold project (approximately 15 g/mt), located in Huancavelica, owned by Buenaventura and managed by INMINSUR. Construction of the gold plant is expected to begin during the first half of this year. Construction of the plant will require an investment of approximately $14M.

Paula. Located in Castilla, Arequipa, this a joint venture of Buenaventura and Cedimin. This project has high-grade veins with direct shipping ore.

b) Projects in progress with significant resources:

Minas Conga. Owned by Newmont, Cedimin and Buenaventura, this a sulphide gold-copper project, located in Cajamarca, 15 km northeast of Yanacocha. Resources are estimated at 400M mt ore, with grades of 0.93 g/mt Au and 0.32% Cu. The schedule has the feasibility study being carried out over two years, with development beginning in 2003. An estimated investment of about $600M will be required.

Tantahuatay. Owned by Southern Peru Copper Corp., Buenaventura, and INVELSA, this project will require an approximate $50M investment for its development. This deposit has both oxide gold and gold and copper in sulphides. Estimates have the production cost of some 650K oz Au (oxides) at $200/oz.

Tres Cruces. This project undergoing exploration is located in Quiruvilca, La Libertad. It is being explored by Battle Mountain Gold (BMG), which has a purchase option contract for 100% of the deposit with Oroperu Resources and Pan American Silver Corp. If BMG decides to exercise the purchase option for the deposit, it will have to pay $27M to its owners. Resources are estimated at 35M mt, with an average grade of 2 g/mt Au.

Huamachuco (La Arena-La Virgen). Owned by Cambior and located in Huamachuco, La Libertad, construction will begin in the second half of this year, with production slated for the first half of 2001. There is an estimated production level above 100K oz/yr, at a cost of $50/oz. Total estimated investment is around $SOM-$75M. Some $6M were invested in 1999. It is estimated that this project has resources of more than 1M oz Au.

Shahuindo. This is a gold project located in the district of Cachachi, Cajamarca. A prefeasibility study has been carried out, which estimates resources of 600K oz Au.

La Zanja. This Newmont and Buenaventura joint venture, located in Santa Cruz, is a disseminated oxide gold deposit with a 38M mt resource and an estimated grade of 0.64 g/mt Au.