Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Buenaventura (NYSE: BVN), Peru’s largest publicly traded precious metals miner, will begin construction on its delayed San Gabriel gold-silver project in the country’s southern region of Moquegua in 2023.
The company had planned to start site works at the $328 million project in the second half of 2021 but had to postpone the move and prioritize reducing debt.
The needed cash injection came in February, when Buenaventura agreed to sell its 43.65% interest in the producing Yanacocha gold-silver-copper mine to Newmont (TSX: NGT)(NYSE: NEM), its partner in the operation.
The $300 million deal included contingent payments of up to $100 million tied to future increases in metal prices, the miner said at the time.
Speaking at a webinar organized by the Peruvian-Chilean Chamber of Commerce, Buenaventura’s chief executive Roque Benavides said San Gabriel will be the company’s first mine to be 100% powered by solar energy.
Mine construction costs had been originally pegged at between $370 million and $430 million, but the use of solar energy helped the company cut the expected expenditure by more than $40 million below the lower end of the range.
