Peru's Yanacocha hopes Minas Conga running by 2011
Last Update: 3:51 PM ET May 5, 2006
LIMA (MarketWatch) -- Minera Yanacocha's Minas Conga gold-copper mine could be operating by 2011, said Carlos Santa Cruz, Newmont Mining Corp.'s (NEM) vice president for South American operations.
"The deposit is in the exploration phase, but the mine could be up and running by the first quarter of 2011," he told journalists late Thursday during an international gold symposium being held here.
Minas Conga has 3.2 billion pounds of copper reserves and 11.8 million ounces of gold, said Santa Cruz.
According to the Newmont official, the project has a 14-year mine life with current reserves.
It will cost at least $1 billion to build, according to Santa Cruz.
Other Newmont officials have pegged the investment at closer to $1.5 billion.
He declined to give a cash cost other than to say it would be higher than the cash cost at Yanacocha.
Meanwhile, it is making a concerted effort to safeguard the local water resource.
"Water is the central issue in our relationship with the rural community," he said.
In September 2004, Yanacocha was forced to shelve exploration plans in the area known as Cerro Quilish, estimated to contain 3.7 million ounces of gold, after farmers protested violently against the mine's expansion. Water was a key issue.
Santa Cruz reiterated that Yanacocha's production this year would be around 2.6 million ounces, down from 3,333,088 ounces in 2005.
In 2007, production will slide to between 1.7 million ounces and 1.8 million ounces, he said.
One of the main problems, according to Santa Cruz, is the slow process of exploration.
"Production is falling because we are not exploring as fast as we should be," he said.
Among other things, he pointed to the slow process to obtain permits and social licenses.
Newmont has a 51.35% stake in Yanacocha, while Compania de Minas Buenaventura SAA (BVN) holds a 43.65% share.
The International Finance Corp. holds a 5.0% stake.
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