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Newmont announces acquisition of Buenaventura’s stake in Yanacocha

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Global Mining Review,

Newmont Corp. and Compañia de Minas Buenaventura S.A.A. announced that the companies have entered into a definitive purchase agreement through which Newmont will acquire Buenaventura’s 43.65% interest in Minera Yanacocha.

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. Buenaventura has been an exceptional partner and we look forward to continuing a strong relationship,” said Newmont President and CEO Tom Palmer. “This acquisition gives Newmont control of the Yanacocha district where we are positioning the sulfides project for profitable production and value generation for decades to come. 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.”

Consistent with Newmont’s district consolidation strategy, the acquisition enhances the company’s ownership of world-class assets. Newmont continues to advance its sulfides project at the pace the pandemic allows, investing more than half a billion dollars through 2022 as the project continues to progress toward a full-funds decision later this year. The sulfides project will increase Newmont’s copper position, supporting the transition to a green economy.

Under the terms of the agreement Newmont will acquire Buenaventura’s interest for US$300 million plus contingent payments of up to US$100 million, in part tied to higher metal prices. Concurrently, Newmont will transfer its ownership interest in the La Zanja joint venture to Buenaventura in exchange for royalties on any future production from the La Zanja operation. Newmont will also contribute US$45 million to Buenaventura to cover future closure costs at La Zanja.

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.

Newmont 2022 and long-term capital outlook

With the acquisition, Newmont is updating previously issued attributable development capital guidance to account for the sulfides project. All other guidance metrics remain unchanged from long-term outlook as announced on 2 December 2021.

The sulfides project will develop the first phase of sulfide 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 average annual production of 525 000 gold equivalent oz/yr with all-in sustaining costs between US$700 – US$800/oz for the first five full years of production (2027 – 2031). An investment decision is expected in 2H22 with a three-year development period. 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.

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