South African miner Gold Fields (NYSE, JSE:GFI) revealed its initial plan to develop a gold deposit into an open-pit mine isn’t feasible.
The miner, world’s number 4 gold producer, is working on the nearly $1.2 billion Chucapaca gold project in a 51%-49% venture with local miner Buenaventura.
“The partners have studied the viability of a large open-pit operation capable of sustaining a 30,000 tonnes per day throughput. A first draft of the feasibility study has been completed and as a result of relatively high capital and operating costs this option would not have delivered acceptable project returns,” the companies said in a joint press release.
Gold Fields said that future studies would focus on other options to develop the deposit, including underground mining or a combined model of open pit and underground.
Earlier this year, the South African company said it expected to start producing gold in Chucapaca in the second half of 2015, depending on negotiations with communities and regulatory permits.
Chucapaca has estimated resources of 7.6 million ounces of gold and equivalents.