Latin American Mega Gold Projects

Gold projects in Latin America continue to advance. There are 6 mega projects in the pipeline with a capex of at least USD$1B and have a potential output totaling around 3.3Moz/y. Two projects are expected to start construction in 2021 while the remaining have some hurdles to overcome related to permitting, advancing studies, implementing changes and new technology to make them more attractive. 

Pascua-Lama, Chile/Argentina

• Capex: US$8.5bn
• The Chilean court ordered the closure of the Pascua part of the project last year after a lengthy and public dispute.
• Barrick has stated that is reevaluating the asset, including reviews of the technical economic, and social aspects. They are also looking at different approaches to permitting and development. This is expected to take several years.
• Barrick is also evaluating the possibility of heap leaching ore from the Penelope deposit of Lama in Argentina at Veladero.
• Previous studies showed potential production of 775,000oz/y gold, along with silver and copper by-products, over a 25-year mine life.

Metates, Mexico

• Capex: US$3.46bn
• Chesapeake Gold will apply new heap leach technology to its Metates project following the acquisition of tech firm Alderley Gold in January.
• The company has stated it will complete a revised economic assessment of the project utilizing Alderley’s licensed heap leach technology.
• Metates hosts one of the world’s largest undeveloped gold deposits, with 18.3Moz of reserves, with potential production at 445,000oz/y gold but development has been held back by metallurgical challenges, weak economics and high initial capex.

Yanacocha Sulfides, Peru

• Capex: US$2.1bn
• Newmont expects to make an investment decision on its Yanacocha Sulfides project in 2021, which will extend the life of its Yanacocha mine beyond 2040.
• Further phases of development have the potential to extend that mine’s life for multiple decades, the company said in December.
• Construction is expected to take three years, with the first year of full production scheduled for 2026.
• Production is expected at 500,000oz/y gold equivalent in 2026-30.

Pueblo Viejo Expansion, Dominican Republic

• Capex: US$1.3bn
• The Pueblo Viejo Expansion aims to extend the life of Pueblo Viejo – Latin America’s biggest gold mine – into the 2040s.
• The expansion involves increasing throughput to 14Mt/y, which would maintain average gold production at 800,000oz/y after 2022.
• An environmental permit for a process plant expansion was approved in 2020. Dominican Republic authorities are evaluating a permit for an increase in tailings capacity required for the expansion.
• If approved, this could see Barrick ramp up construction activities in 2021.
• Pueblo Viejo is a 60:40 JV between Barrick and Newmont.

Soto Norte, Colombia

• Capex: US$1.2bn
• The future of Minesa’s Soto Norte project has been thrown into doubt after Colombian environmental authority Anla shelved a mining license application in October.
• Anla said it had been unable to reach a decision on the project.
• Key issues looked at in the application include the definition of the project’s area of influence, technical aspects related to tailings, geotechnical, hydrological and hydrogeological matters and the risk management plan and economic evaluation.
• Minesa, owned by the Abu Dhabi government through investment arm Mubadala Investment Company, has yet to spell out its next steps at Soto Norte.
• Production is estimated at 430,000oz/y gold.

Cangrejos, Ecuador

• Capex: US$1bn
• Lumina Gold has outlined economically viable development at Cangrejos, with the recent surge in metals prices rendering it more attractive.
• A 2020 PEA showed average production of 366,000oz/y gold and 46Mlb/y (21,000t/y) copper over 25 years, with a post-tax IRR of 16.2% at US$1,400/oz gold.
• The figure rises to 21.7% at US$1,680/oz gold.
• The next step for Cangrejos would be a PFS, but Lumina has yet to make a decision whether to go ahead amid reports the company could be sold.

Volcán, Chile

• Capex: US$1bn
• Hochschild Mining has not made any major announcements regarding its Volcán project recently, but mentioned the potential to improve metallurgical recoveries in a 2020 presentation.
• In 2016 the company said the development could go ahead in a higher gold price environment.

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To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal