Buenaventura eyes 16-year boost for new Peru mine

Buenaventura (NYSE: BVN), one of Peru’s largest mining firms, is considering extending the life of its San Gabriel gold project in southern Peru by as much as 16 years.

The possible extension comes as new exploration campaigns point to significant resource growth beyond current reserves, Lima-based publication Rumbo Minero reported.

The underground San Gabriel mine in the Moquegua region, which is nearing commercial production, holds more than 1.8 million oz. of gold reserves and more than 2.4 million oz. in measured, indicated and inferred resources, geology manager José Luis Aquino said this week. 

The company produced its first gold bar at San Gabriel in December and expects annual output to surpass 100,000 oz. in the coming months as the operation ramps up towards full capacity.

Shares in Buenaventura gained 4.3% on Friday in New York to $35.42 apiece, valuing the company at $10.1 billion. They’ve traded in a 52-week range of $14 to $44.67. 

Main output

San Gabriel has become Buenaventura’s flagship development project as the company seeks to expand production from one of Peru’s largest mining portfolios. The mine is expected to process 2,000 tonnes per day by the end of 2026, producing 70,000 to 80,000 oz. of gold next year, before reaching its nominal capacity of 3,000 tonnes per day in 2027.

The expansion plans underscore how major Latin American gold producers are turning to brownfield exploration to extend the lives of their mines and offset rising development costs for new projects. 

Longer-lived operations can improve returns on existing infrastructure while strengthening production pipelines in a tightening global gold market.

One of San Gabriel’s main technical challenges has been the poor quality of its rock mass, with about 90% classified as low grade, geomechanically. 

Buenaventura said it adopted an underground mining method not previously used in South America to improve selectivity, reduce dilution and enhance worker safety. 

The company added that the deposit remains open at depth and near surface, offering further exploration upside.