Buenaventura:Peru OKs Environmental Studies On 2 Gold Projects

Compania de Minas Buenaventura SA (BVN) said Friday that Peru's government has approved environmental impact studies for its La Zanja and Tantahuatay gold projects and that work on both is progressing.

Buenaventura has a 53% stake in La Zanja, located in northern Peru, while Newmont Mining Corp. (NEM) has a 47% stake. The project is expected to produce 100,000 ounces of gold a year.

"We expect to begin production in the third quarter of 2010. Certainly we will be in operation in the second half of 2010," Buenaventura Chief Executive Roque Benavides said in a conference call with analysts.

The Tantahuatay project is 40% owned by Buenaventura, which will be the operator, while Southern Copper Corp. (PCU) has a 44% stake, with the rest owned by others.

Buenaventura officials said that exploration and other work is continuing at its Tantahuatay project, calling it a "growing resource."

Benavides said the project is expected to begin production in 2011.

"We are going ahead and we expect to see some results in Tantahuatay," Benavides said.

That project is seen producing 100,000 ounces of gold a year.

In releasing second-quarter financial results late Thursday, Buenaventura said: "Construction of a 15,000 [ton-per-day] open pit and heap-leach operation has begun at La Zanja and will start at Tantahuatay as soon as Compania Minera Coimolache SA [partially owned by Buenaventura] completes the acquisition of surface rights."

Buenaventura expects to produce 450,000 ounces of gold this year from its operating mines in Peru.

It also holds a 43.65% share in Minera Yanacocha, which is expected to produce close to 2 million ounces of gold this year.

-By Robert Kozak, Dow Jones Newswires; 511-99927-7269; [e-mail]