Peru's Yanacocha Gold Mine May Turn To Underground Veins, Copper

ICA, Peru, Aug 12, 2010 (Dow Jones Commodities News via Comtex) -- Minera Yanacocha, which operates the open-pit Yanacocha gold mine in northern Peru, could eventually begin development of underground veins for precious metals and copper mining at the site, the chief executive of Compania de Minas Buenaventura SAA (BVN, BUENAVC1.VL) said.

Speaking to reporters on the sidelines of a conference organized by the WAAIME group, Roque E. Benavides said that increases in the 1.4 million to 1.5 million ounces of gold expected to be produced at Yanacocha this year are unlikely.

"What we are doing is evaluating the development of underground deposits, and of course there is an important potential for copper at Yanacocha," Benavides said, adding, "I think Yanacocha still remains a world-class mine."

Buenaventura has a 43.65% stake in Minera Yanacocha, which is operated by Newmont Mining Corp. (NEM)

Benavides said there is no specific start date for when copper mining at Yanacocha might begin, but pointed out the company expects to start producing copper at its Minas Conga gold-copper project in northern Peru in 2014. Minas Conga is being developed with Newmont.

Benavides also noted that operations at the La Zanja gold mine started in the last couple of weeks.

"It is a ramp-up and it is a heap leach operation, which means that the first ore we will be getting will be towards September," he said.

The company has said expected production is 100,000 ounces of gold a year from the La Zanja project, in which Newmont Mining has a minority position.

Buenaventura is also working to develop the Chucapaca gold, silver and copper project in southern Peru, alongside Gold Fields Ltd. (GFI, GFI.JO). Benavides noted the companies are carrying out drilling.

"I am sure that we will have more resources," he said, adding that it is a promising deposit.

Benavides said that workers at Buenaventura's Orcopampa gold mine have presented a strike notice, as part of ongoing contract negotiations. "We expect to be able to conclude talks there," he said.