Yanacocha Sulfidesproject called to produce 6.5 million ounces of gold and 1,200 million pounds of copper per year from 2024, now has a new majority shareholder, after the Peruvian company Buenaventura sold 43.65% of its participation to Newmontwhich already held 51.35%, for a total of US$300 million, plus contingent payments linked to higher metal prices of up to US$100 million.
The operation recognized by the president of Newmont, Tom Palmer, as part of a strategy to “consolidate areas and improve its ownership of world-class assets”, strengthens the continuity of this important foreign investment in Cajamarca for US$ 2,100 million, indicated as one of the most promising projects of the 2022-2025 Multiannual Macroeconomic Framework.
“Newmont continues to advance the Yanacocha Sulphides project at the rate that the pandemic allows, investing more than US$500 million during 2022 (…) We are committed to continuing to promote sustainable development in Peru,” the company said.
The project is anticipated to add an average annual production of 525,000 ounces of gold, with sustaining costs of between US$700 and 800 per ounce, during the first five full years of production (2027-2031), as well as an investment decision in the second half of 2022.
an investment theme
For the head of Research at Renta4 SAB, César Romero, Buenaventura intends with this sale to improve its financial metrics, after appearing on the stock market with a “high leverage” (ratio that measures the indebtedness of a company) due to the low performance of its mines for several periods. In the case of Newmont, he explained, it is normal for his shares to fall slightly, since he is shedding cash for a long-term project.
“We believe that the two companies are in a situation in which they do not believe that a political change affects the constitutionality of the country. They are pointing out that the conflicts may continue, but not beyond what has been seen in other cases such as Las Bambas, Cerro Lindo and Hochschild, which finally returned to production, ”he said.
The investment comes from Cajamarca
Rómulo Mucho, a professor at UNMSM, anticipates that Buenaventura will now seek to focus on its other projects, such as San Gabriel, Molle Verde, Yumpaq and Uchucchacua, this last stop starting in 4Q 2021.
Yanacocha Sulphides will allow the continuity of the open pit gold mine. The first phase of the deposits will be developed through an integrated processing circuit that includes an autoclave to produce 45% gold, 45% copper and 10% silver.
Newmont could acquire the remaining 5% of the Yanacocha property held by Sumitomo Corporation, in exchange for the original price of its purchase in 2018.
The data
Gold. Newmont will transfer to Buenaventura its participation in La Zanja in exchange for royalties on future productions, in addition to US$ 45 million for its closing.
The word
Pedro Francke, former Minister of Economy
“The promotion of private investment carried out through dialogue with entrepreneurs from around the world continues to bear fruit in our country. Foreign investment remains dynamic”.
Yanacocha sulfides: a new scenario for mining in 2022
Source: Larepublica
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