Newmont to ditch Kori Chaca

Wednesday, May 21, 2003

Denver-based Newmont Mining (NYSE: NEM) will permanently scrap plans to develop the Kori Chaca gold deposit in southwest Bolivia, a source at the company's local subsidiary Inti Raymi told BNamericas.

"It's a political decision, as social and political pressures are damaging the company," the source said. Development of the project was suspended earlier this year.

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Kori Chaca, in Oruro department, has a resource of 12Mt grading 0.8g/t gold, and Inti Raymi had been planning on producing around 230,000oz of gold from an open-pit mine over two years.

The idea was to truck the ore 45km to the larger Kori Kollo mine, also owned by Inti Raymi, for processing.

According to local newspapers, Kori Chaca was put on hold because of the costs involved, estimated at US$20mn.

A spokesperson for Newmont, the world's biggest gold miner, had told BNamericas earlier this week that the company was still weighing up development of Kori Chaca, but admitted it could be sold off.

"We are looking at a variety of options and selling it is obviously one of them," said the official, Doug Hock, who added that the deposit was economic at current gold prices. A feasibility study was recently completed on the project, he said.

Newmont owns 88% Inti Raymi and the other 12% is held by local companies.

Kori Kollo, expected to produce around 150,000oz of gold this year, is in the process of being closed down because of depleted reserves.