Buenaventura advancing Tantahuatay, La Zanja

- Wednesday, September 16, 2009

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Peruvian miner Buenaventura (NYSE: BVN) aims to start construction at its 40%-owned Tantahuatay gold-silver project next year, pending the finalization of surface rights agreements, said VP of exploration César Vidal.

"This is the tricky thing for this project," Vidal said Wednesday during a presentation at the Denver Gold Forum, adding the project has secured rights for 700ha but must obtain rights for another 200ha.

The EIS is also still being finalized for one of the two relevant ore bodies, Ciénaga, said Vidal. Production is targeted to start in 2011.

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Southern Copper (NYSE: PCU) holds 44% of the US$60mn Tantahuatay project, which is due to produce 80,000-100,000oz/y of gold for 10 years.

LA ZANJA

"This is the third month of construction" at the La Zanja gold project, Vidal said, adding that this week the company received the second to last operating permit. The mine is due to start production next year.

Exploration is also ongoing at La Zanja. "We are finding new ore bodies," said Vidal, noting that recent trenching results at the Castrejón area returned not just gold but also 250m grading 0.1% molybdenum.

Drilling is also planned to resume at the Cerro La Zanja target. "You will see the resource base of La Zanja grow," said the VP.

CHUCAPACA

Buenaventura said it expects to see its partner on the Chucapaca project in Peru come out with a scoping study in the second quarter of next year, said Vidal.

The project has seen 12,000m of drilling since the discovery hole was drilled one year ago, and the company expects to see a multimillion ounce gold resource emerge.

Partner Gold Fields (NYSE: GFI) has three drill rigs going at the project, he added. Drill highlights so far include 80.5m grading 2.17g/t gold and 0.26% copper including 37.0m grading 7.34g/t gold, as well as 44.1m grading 8.94g/t gold and 123m grading 1.70g/t gold.

CERRO QUILISH

Community opposition continues to be a negative factor in the advancement of the Cerro Quilish deposit, which would form part of Buenaventura's 43.7% owned Yanacocha mine.

The 8Moz deposit is not included in the Yanacocha reserve base due to the opposition, said Buenaventura CEO Roque Benavides during the presentation.

"It mainly has to do with water," Benavides said, adding the mine is looking for ways to generate its own water and is seeking independent institutions that can confirm to the communities that development would not impact water quality.

"We don't have a timetable for that," Benavides said.

Buenaventura expects to produce a total 1.3Moz gold this year, with 450,000oz coming from direct operations.

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