Peruvian authorities have suspended South African miner Gold Fields' (NYSE: GFI) permit for its Chucapaca open-pit gold project in the country’s south.
According to Gestión (in Spanish), the measure follows an inspection that showed the company did not have all the necessary land permits.
But sources quoted by the paper said the suspension is not surprising as in November last year, a feasibility study had already questioned the viability of the project because of relatively high capital and operating costs.
The $1.2 billion project, with estimated reserves of about 8 million ounces of gold, is a joint venture between operator Gold Fields, which owns a 51% stake in the project, and Peru's largest publicly traded precious metals firm, Compañía de Minas Buenaventura (NYSE:BVN), which holds the remaining 49% stake.
Gold Fields also operates the Cerro Corona open-pit gold and copper mine in northern Peru, which produced 177,070 ounces of gold last year.