Miners make progress at LatAm’s top gold expansions

Mining companies are making progress at major gold mine expansions in Latin America, despite continuing community relations and COVID-19 challenges.

Firms are seeking key milestones on the tailings, ownership and community fronts at three of the region’s top gold expansions.

The projects are forecast to deliver around 1.4Moz/y gold or gold equivalent in the coming years, for investment totaling about US$4bn, as companies seek to take full advantage of elevated gold prices, with some experts forecasting further price records.

TOP LATAM GOLD EXPANSIONS

Pueblo Viejo Expansion, Dominican Republic

Capex: US$1.3bn

Barrick Gold reported a significant step forward at its US$1.3bn Pueblo Viejo Expansion project, as the Dominican Republic government completed a strategic review of possible tailings storage facility (TSF) sites.

The tailings capacity boost required for the expansion has proved challenging, with the company’s original dam proposal sparking violent protests in Yamasá municipality, Monte Plata province, last year.

To break the deadlock, both Barrick and the government conducted evaluations of potential locations for the TSF.

These studies have now concluded, Barrick said on April 8, with two sites – both in Sánchez Ramírez province – selected for further investigation.

Next steps

While the final shortlist of two sites has been drawn up, Barrick still faces potential challenges and delays.

Once the favored option is chosen, Barrick will need to complete an environmental and social impact assessment (ESIA) in accordance with domestic legislation and following international standards.

This will need to set out mechanisms to mitigate potential environmental impacts and to improve local livelihoods, Barrick said.

Once completed, the ESIA would need to be submitted to the government for evaluation and a final decision.

The expansion aims to extend operations at Pueblo Viejo, Latin America’s largest gold mine (in picture), until the 2040s, with output averaging around 800,000oz/y.

The mine is a key contributor of taxes in the Dominican Republic.

“Pueblo Viejo’s expansion project is expected to increase total direct and indirect taxes to over US$9bn from the beginning of commercial production in 2013 through to the extended life of mine beyond 2040,” CEO Mark Bristow said in a release.

Work on a plant expansion – the other main element of the US$1.3bn project – is due to conclude this year after being delayed a few months by supply chain disruptions.

Barrick has 60% of Pueblo Viejo with Newmont holding 40%.

Yanacocha Sulfides, Peru

Capex: US$2.5bn

Newmont is seeking to secure 100% ownership of its Yanacocha asset in a vote of confidence in its sulfides expansion, which has been held back by pandemic-related delays and rising costs.

The US-based company previously announced an agreement to acquire Peruvian miner Buenaventura’s 43.65% stake in Yanacocha for up to US$400mn, which Newmont said demonstrates its confidence in the proven mining district.

“With the opportunity to acquire the remaining 5% ownership in Yanacocha [held by Sumitomo], 11 of our 12 operations will be 100% owned, ensuring our stakeholders retain full benefits of Newmont’s clear strategic focus and superior execution,” CEO Tom Palmer told the BMO Global Metals & Mining Conference in February.

Timing

Newmont is on track to make a full-funds decision on the Yanacocha Sulfides project in H2, the company said in its latest corporate presentation in March.

The project involves total investment of around US$2.5bn – up from previous estimates of US$2.1bn – and will deliver production of around 525,000oz/y gold equivalent for the first five full years, in 2027-31.

“We are working to a timetable that the pandemic allows,” Palmer told the BMO event, adding that the 3,000-4,000 workers who will be required to move up to the mine site in the Andes mountains will need to be able to work safely and productively.

The aim is to begin construction late in 2022, which will give the company time to improve understanding of the pandemic and build a camp, conduct detailed engineering, firm up costs, order long lead time items and establish partnerships with local contractors, Palmer added.

Los Filos Expansion, Mexico

Capex: US$230-250mn

Equinox Gold delayed construction of a carbon-in-leach (CIL) plant at its Los Filos mine after operations were disrupted by community blockades last year.

The plant – coupled with a forecast rise in grades – will boost output at Los Filos from around 200,000oz/y currently to 300,000-350,000oz/y, CEO Christian Milau told the BMO conference, and is expected to cost around US$230-250mn.

“As we get stability with the communities and as we get comfortable again, we will go back in there. We will build that CIL plant, but in the interim it will be a big heap leach operation,” he said.

The delay allows Equinox to focus on completing its Greenstone project in Canada first, and Los Filos may have to compete with a planned expansion of the Castle Mountain mine in the US if the company decides not to develop both simultaneously.

“The Los Filos [expansion] has got a little bit more flexibility,” Milau added.