Newmont buys partner’s stake in Yanacocha
Bullion major Newmont on Tuesday announced a $300-million transaction to give it control over the Yanacocha district, in Peru, where it is gearing up for a full investment decision later this year on a sulphides project that will extend operations for multiple decades.
Newmont announced that it would buy out partner Buenaventura’s 43.65% interest in Yanacocha for $300-million, plus future payments of up to $100-million that were tied to metal prices.
Concurrently, Newmont would transfer its ownership interest in the La Zanja joint venture to Buenaventura in exchange for royalties on any future production from the operation. Newmont would also contribute $45-million to cover future closure costs at La Zanja.
“This acquisition gives Newmont control of the Yanacocha district where we are positioning the sulphides project for profitable production and value generation for decades to come,” said CEO Tom Palmer.
The group has invested more than half-a-billion dollars through 2022 on its sulphides project and will announce a full-funds decision in the second half of the year.
The project will develop the first phase of sulphide deposits at Yanacocha through an integrated processing circuit, including an autoclave, to produce 45% gold, 45% copper and 10% silver.
The project is expected to add an average of 525 000 gold-equivalent ounces a year, with all-in sustaining costs between $700/oz and $800/oz for the first five full years of production.
The first phase focuses on developing the Yanacocha Verde and Chaquicocha deposits to extend Yanacocha’s operations to 2040, with second and third phases having the potential to extend life for multiple additional decades.
Newmont may also have an opportunity to fully consolidate ownership of Yanacocha, as Sumitomo is assessing whether to exercise a right in its 2018 purchase agreement to return its 5% interest to Yanacocha in exchange for the original purchase price.
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