Precious Metals

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>>> Colorado's Newmont acquiring control of South America's largest gold mine

Global demand for copper is projected to rise more than 50% this decade.


4-14-22

By Greg Avery

Denver Business Journal


https://www.bizjournals.com/denver/news/2022/04/14/colorado-newmont-mining-gold-copper-peru.html?ana=yahoo


Gold miner Newmont Corp. has bought out two other partners, in a pair of deals worth more than $400 million, to become the sole owner of South America’s largest gold mine.

The Greenwood Village-based company (NYSE: NEM), the largest gold producer in the world, reached a deal to buy a 5% ownership stake in the Yanacocha mine in Peru for $48 million. Newmont is acquiring the stake from Japan’s Sumitomo Corp.

The transaction is expected to close by summer. It sets Newmont up for a planned expansion of the massive mine in the Peruvian highlands and to begin extracting significant amounts of copper from the mine as well as gold.

“This transaction gives Newmont full equity ownership of the Yanacocha district where we are positioning the sulfides project for profitable production and value generation for decades to come,” said Tom Palmer, Newmont president and CEO, in a statement.

The companies disclosed the deal Wednesday, two months after Newmont struck a deal with Compañia de Minas Buenaventura S.A.A. (NYSE: BVN) to buy its nearly 44% stake in Yanacocha for a base price of $300 million that could rise to $400 million after contingency payments that are connected to the price of gold and other metals.

Newmont also agreed to give Buenaventura its ownership in a joint venture operating the La Zanja open pit mine in Peru and put down $45 million toward the 12-year-old mine’s future closure costs as part of the deal.

Newmont operates 12 mine complexes in eight countries and employs 35,000 people.

The Yanacocha mine has generated nearly 40 million ounces of gold since 1993. Newmont forecasts that Yanacocha will produce 225,000 ounces of gold and other valuable metals in 2022.

The miner’s acquisitions give it control of the whole Yanacocha mine district, which the company sought as it prepares to fully fund a project to expand the operation and extend its life past 2040. The expansion has been years in the making.

“Newmont has successfully operated in Peru for more than 30 years and has deep knowledge of the asset and the value it brings to Newmont stakeholders,” Palmer said. “We are committed to continuing to be a catalyst for sustainable development in Peru by working closely with communities in the Cajamarca region and the Peruvian government.”

The company says it expects the final decisions this year that will allow it to start the expansion.

The company has said it expects the copper output of Yanacocha Sulfides facility to be worth the equivalent of 500,000 ounces of gold annually between 2026 and 2030.

Copper production has caught Newmont’s eye because it is present at several of its gold mining sites around the world and global demand for copper is projected to rise more than 50% this decade. Copper is key to expanding power lines and in increased production of things like solar and wind power systems, and electric vehicles.

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