Newmont wins control of Latin America’s largest gold mine

Mining giant Newmont Gold (NGC-N) has won a majority interest in Latin America’s largest gold mine.

A Peruvian court has ruled that Newmont and Compania de Minas Buenaventura have the right to acquire a 24.7% interest in Minera Yanacocha, currently held by an affiliate of BRGM, an agency of the French government.

The US$109.3-million acquistion will increase to 51.4% Newmont’s stake in Yanacocha. Buenaventura will own 43.6%, with the remaining 5% held by International Finance Corp.

Last year, Yanacocha produced 552,000 oz. gold at a total cash cost of US$119 per oz., making it the largest gold producer in Latin America and among the lowest-cost producers in the world.

By the end of the year, proven and probable reserves in the deposit stood at 4.9 million oz.

In 1994, Newmont and Buenaventura filed suit against BRGM to seek enforcement of a provision giving Yanacocha shareholders right of first refusal on the sale, transfer or loss of control of any interest in Yanacocha. The suit followed the French government’s decision to privatize BRGM and transfer the agency’s interest in Yanacocha to another company.

In February 1995, the partners won preliminary approval from the Peruvian courts to acquire BRGM’s interest.