Newmont hits at Yanacocha

Newmont Mining (NEM-N) is expanding exploration efforts at the Yanacocha gold mine in northern Peru, having encountered its best drill hole on the property earlier in the year.

At the Corimayo target, the company intersected 1,400 ft. of oxide mineralization grading 0.1 oz. gold per ton, including a 130-ft. interval grading 0.43 oz. The target sits beneath the La Quinua gravels, southwest of the main Yanacocha pit.

A more recent hole under the Chaquicocha target, east of the Carachugo pit, cut 420 ft. of 0.15 oz. gold, while a second deep hole under the large Cerro Yanacocha deposit intercepted 1,260 ft. averaging 0.32 oz. silver and 0.008 oz. gold per ton, plus 0.88% copper. Within that long interval was a 330-ft. section of 1.9% copper, 0.88 oz. silver and 0.018 oz. gold.

Earlier in the year, Newmont had as many as 30 drill rigs working on the property. The company expects to expand deep drilling at Chaquicocha, diverting several rigs that were slated for reserve definition on previous oxide discoveries.

The deeper mineralization represents a departure from the lower-grade, near-surface oxide mineralization and represents significant potential for underground development at Yanacocha.

As a result of the stepped-up exploration, Newmont expects to report a 15% increase in reserves at Yanacocha — topping 40 million oz., though still short of the massive 60% reserve increase at the end of 1999. However, mineralization in the most recent holes is not expected to be included in the year-end reserves.

Newmont owns a 51.35% stake in Yanacocha, with Compania Minas Buenaventura (BVN-N) holding a 43.65% interest. International Finance Corp. controls the remaining 5%. Production in 2000 should reach 1.8 million oz. at a total cash cost of less than US$90 per oz.