New Scoping Study Under Way on Peru's Chucapaca Gold Mine Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--A new scoping study for the Chucapaca mining project in Peru is under way after the initial feasibility study, completed a few months ago, indicated it was not feasible because of high capital expenditures and operational costs. The Chucapaca project is being developed by Canteras del Hallazgo S.A.C (Lima, Peru), a joint venture between Gold Fields Limited (NYSE:GFI) (Johannesburg, South Africa), which owns a 51% stake in the project, and Peru's largest publicly traded precious metals firm, Companía de Minas Buenaventura S.A.A (NYSE:BVN) (Lima), which owns the remaining 49% stake. The Chucapaca project is in the district of Ichuna, in Moquegua, southern Peru.

In 2010, a positive preliminary scoping study showed the viability of an open pit mining operation with a flotation circuit to produce an average of 500,000 ounces per year of gold. At the time, the project was thought to be worth about $1.2 million. However, a first draft of the feasibility study indicated a capital expenditure of just less than $2 billion to achieve the planned production capacity, based on a 30,000-ton-per-day mining operation.

Gold Fields Limited, which operates the joint venture, announced that it is looking into an alternative option for a new mining configuration, such as a lower-volume operation with higher grades than what was contemplated in the feasibility study. Furthermore, the company is considering combined open pit and underground mining and is advancing additional exploration on satellite deposits to expand resources. Chucapaca has estimated resources of 7.6 million gold-equivalent ounces.

In Peru, Gold Fields, through its 98.5% subsidiary Gold Fields La Cima S.A.A. (Lima), operates the Cerro Corona gold and copper mine, which is in the Department of Cajamarca in northern Peru. Cerro Corona is a large, open pit copper gold mine operation with an 18,000-ton-per-day flotation plant. In 2012, Cerro Corona produced 177,070 ounces of gold.

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