Extensive drilling at Peru’s Yanacocha mine, South America’s largest gold mine, is expected to boost gold reserves considerably.
The mine’s operator and 51%-owner, Newmont Mining (NEM-N), predicts that the number of contained ounces will rise to 20 million by year-end.
The increase represents a 40% increase over 1997 year-end reserves of 13.9 million oz., and includes depletion of 1.5 million oz. for production in 1998.
The operation will reach the 20-million-oz. mark in reserves after only five years in production, says Carlos Santa Cruz, Yanacocha’s general manager.
Most of the increase comes as a result of development drilling at the Quinua deposit, east of the main operation. There, Newmont is scheduled to drill 420 holes, spanning 39,000 metres. The results are expected to add 4 million oz. gold to Quinua, which was discovered only last year. Current reserves at the deposit stand at 3 million oz., and the company expects to add 1.7 million oz. to the Yanacocha Sur deposit after completing metallurgical tests.
Newmont also expects reserves and resources (the company prefers the category “mineralization not yet reserves”) for the whole operation to increase to about 23 million oz., up from 19.4 million oz. last year. The company has not released grade and tonnage estimates for the various increases.
Santa Cruz expects the mine to crank out as much as 1.35 million oz. gold in 1998, compared with 1 million oz. last year. Production should reach as high as 1.5 million oz. in 1999, and it is believed this level can be sustained for several years on the strength of the Quinua deposit.
Newmont intends to construct a fourth leach pad at Yanacocha at a capital cost of US$60 million. Production could begin as soon as the end of 2000. Newmont still needs time to continue definition drilling on the deposit known as El Tapado, which is situated underneath La Quinua. Total cash costs for the project are pegged at US$150 per oz.; recovery rates, at 65-70%.
Newmont’s partners at Yanacocha include Minas Buenaventura (BVN-N) with a 44% interest, and International Finance Corp., with 5%.
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