Yanacocha mine pours millionth oz. of gold

Newmont Gold (NYSE) and its partners at Minera Yanacocha in Peru have poured their one-millionth ounce of the yellow metal.

The open-pit, heap-leach mine, 375 miles north of Lima, started up in August 1993, and production grew rapidly from 304,000 oz. in 1994 to 522,000 in 1995. This year, the mine is expected to crank out 625,000 oz.

Cash costs in 1995 were US$121 per oz.

The operation consists of three mines — the Carachugo, Maqui Maqui and San Jose. The San Jose is just starting up, with full production projected for March.

Capital expenditures for 1994 amounted to US$40 million, raising to US$120 million Newmont’s total investment in the joint venture.

Last year, Newmont and its Peruvian partner, Compania de Minas Buenaventura, won a preliminary ruling from the Peruvian courts to acquire the shares of Yanacocha held by BRGM of France. This will increase Newmont’s ownership to 51.4% from 38%. The acquisition price remains in litigation.

News of the gold pour at Yanacocha comes on the heels of another profitable year in 1995. Newmont Gold reported earnings of US$124.9 million (or US$1.17 per share) for the year, compared with US$83.4 million (70 cents per share) for 1994.

For its part, Newmont Mining earned US$112.6 million last year, compared with US$76.1 million in 1994.

Gold production rose 11% to 1.8 million oz. in 1995. Fourth-quarter production was up 19%, setting a new record at 534,700 oz.

Newmont’s open-pit operations in Nevada’s Carlin trend accounted for the bulk of the year’s gold production. Production at Yanacocha, and at the Zarafshan joint venture in Uzbekistan, contributed to the total.

Through a capital investment of nearly US$1 billion, the company expects to boost production by 12-15% in each of the next two years.

These increases are expected to come from Indonesian projects, currently in the development stage.

The Minahasa gold project, northeast of Jakarta on the island of Sulawesi, is 92% complete, and mining has already begun. Ore is being stockpiled and operations should start in March, with 1996 output projected at 90,000 oz.

The feasibility study for the Batu Hijau gold project, east of Jakarta on the island of Sumbawa, is expected by the end of the quarter.