S&P takes Yanacocha debt off CreditWatch

Standard & Poor's affirmed its BBB- rating on debt issued by Peruvian gold miner Yanacocha, and removed the rating from CreditWatch where it was placed in November 2000. The confirmation follows a review of Yanacocha's ability to operate under "a severe sovereign-induced stress scenario," which S&A said could involve a default by the Peruvian government on its local and foreign currency obligations. The debt, known as Yanacocha Receivables Master Trust's certificates series 1997A and due 2005, is secured by revenues from the sale of gold to offshore customers. "Given Yanacocha's conservative financial policy, competitive cost structure (supported by a good quality, low cost reserve base), and its links to its creditworthy shareholders, Standard & Poor's believes the company is well positioned to weather any economic, political, or financial shocks that could result from operating in Peru," the agency said. Yanacocha is Latin America's largest gold mine with output of some 2.5Moz a year. The open-pit mine in Cajamarca department is operated by Denver-based Newmont Mining (NYSE: NEM), while local miner Buenaventura (NYSE: BVN) has a minority stake in Yanacocha.