Latin America Mining: Top Gold Expansion Project Pipeline

Gold prices have steadily risen these past few months from a January’s average of US$1,561/oz to around to US$1,700/oz, largely due to political responses to the COVID-19 pandemic.

A more positive outlook for gold could also see major gold projects come into play in Latin America. Higher prices will boost margins for miners encouraging them to invest further in their operations. 

BNamericas, a regional industry news provider, recently published an article outlining at least five US$200mn-plus gold expansions, with combined capex totaling US$4.52bn. 

Yanacocha Sulfides – Peru

• Status: Active
• Capex: US$2.1bn
• Production: 500,000oz/y gold equivalent
• Owners: Newmont (51.35%), Buenaventura (43.65%), Sumitomo (5.0%)
• Investment decision to be made in 2021

Newmont’s Yanacocha Sulfides project aims to extend operations at Yanacocha, formerly one of the region’s biggest gold mines.

The project involves expanding open pit and underground operations, producing gold and copper from sulfide and oxide material.

It has the potential to extend operations to 2041, producing about 500,000oz/y gold equivalent through 2030 and 6.5Moz over the life of mine.

Without the expansion, production is forecast to decline before ending in 2028. Newmont expects to make a decision on Yanacocha Sulfides in 2021, with a three-year development schedule for first production in 2024.

Pueblo Viejo Expansion – Dominican Republic

• Status: Active
• Capex: US$1.3bn
• Production: 800,000oz/y gold
• Owners: Barrick Gold (60%), Newmont (40%)

The Pueblo Viejo Expansion will extend the life of  Latin America’s biggest gold mine, potentially into the 2040s.

The planned investment involves the addition of a pre-oxidation heap leach pad, a new mill and flotation concentrator and additional tailings capacity.

The expansion will see output maintained at around 800,000oz/y gold after 2022, with Barrick aiming to convert 7Moz gold in resources to reserves.

Barrick has been keen to highlight the project’s benefits to the Dominican Republic, both as a key source of tax income and jobs.

Prospects for the project appear to have been given a boost by president-elect Luis Abinader’s election win earlier this month.

Abinader has outlined plans to approve the expansion and take steps to establish the Dominican Republic as a mining-friendly jurisdiction.

Lagunas Norte Expansion – Peru

• Status: Suspended
• Capex: US$640mn
• Production: 240,000oz/y gold
• Owners: Barrick Gold
• Will depend on gold prices and improving economics.

Barrick placed the Lagunas Norte mine on care and maintenance and shelved the US$640mn expansion project in 2019, after it failed to meet the company’s investment criteria.

But all hope is not lost. Barrick announced plans to enable  47 drilling rigs at the Peruvian asset in June as it continues to weigh up its options.

The expansion – which will see production resume at 240,000oz/y gold over 10 years – could also benefit from the recent surge in gold prices.

Marmato Underground Project – Colombia

• Status: Active
• Capex: US$269mn
• Production: 165,400oz/y gold
• Owner: Caldas Gold
• Studies and financing advancing

A July Pre feasibility study confirmed the Marmato expansion as an economically-viable project.

Caldas plans to expand underground operations, which will ultimately form two distinct operations, the existing Upper Mine and new MDZ operation.

The PFS indicated average annual production of 165,400oz gold over a 14-year mine life, with capex estimated at US$269mn and a post-tax IRR of 20.1% at US$1,400/oz gold prices.

The study proposes expanding a processing plant to 1,500t/d throughput capacity, compared to 1,200t/d in a 2019 PEA.

Caldas has also made inroads into financing, through a US$110mn streaming deal with Wheaton Precious Metals.

Ongoing drill programs could further add to the mine life at Marmato.

Los Filos Expansion – Mexico

• Status: Active
• Capex: US$213mn
• Production: 350,000oz/y gold
• Owner: Equinox Gold
• Company is pushing for 2021 production

The Los Filos expansion aims to double output at the Mexican asset, and help Equinox become a 1Moz/y gold producer.

The investment includes building a US$115mn carbon-in-leach (CIL) plant, where a construction decision is expected this year after a study incorporated several optimization opportunities.

The expansion also involves development of an underground mine at the Bermejal deposit and the Guadalupe open pit, where stripping is underway

Harris Gomez Group is a Common Law firm, with offices in Santiago, Bogotá, and Sydney. We also have legal teams in Mexico, Peru, Ecuador, Brazil, and Argentina. Over the last 19 years, our team of English speaking Lawyers and Attorneys have been supporting foreign companies with their growth in Latin America. Many of our clients are technology companies, service providers and engineering companies that focus on the mining, energy and infrastructure markets. 

To better understand how we can support your management team in the Region, please contact Cody Mcfarlane at [email protected]