Newmont announces acquisition of Buenaventura’s Stake in Yanacocha
Newmont Corporation announced that it will acquire Compañia de Minas Buenaventura’s 43.65 percent interest in Minera Yanacocha in Peru.
“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 $300 million plus contingent payments of up to $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 $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 percent interest to Yanacocha in exchange for the original purchase price.
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 Dec. 2, 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 percent gold, 45 percent copper and 10 percent silver. The project is expected to add average annual production of 525,000 gold equivalent ounces per year with all-in sustaining costs between $700 and $800 per ounce for the first five full years of production (2027-2031). An investment decision is expected in the second half of 2022 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.