(New throughout, adds Kuczynski's comments on gold in
LIMA Dec 26 President Pedro Pablo Kuczynski
proposed dredging a reservoir in a dry northern region of Peru
to extract what he described as "much more gold" than what the
country's biggest gold mine holds, according to an interview
with a local newspaper.
Kuczynski said Poechos, Peru's biggest reservoir and a key
source of water for drinking and farming in the northern Piura
region, could hold one gram of gold per cubic meter in 580
million cubic meters of sediment.
"It has to be dredged," Kucyznski said in a videotaped
interview with financial daily Gestion.
"It has more gold than Yanacocha, much more," he added in
reference to the deposit that Newmont Mining Corp and
Buenaventura have tapped for more than two decades.
Sediment from the nearby River Chira that feeds Poechos has
reduced the reservoir's capacity for storing water, prompting
farmers to demand its ridge be raised.
Kuczynski said the sediment could be removed from Poechos
for 5-6 years to extract its gold before letting it accumulate
again for 20 years, a repeatable process that he said would make
it "the only mine in the world that's renewable."
Kuczynski, a former investment banker who once managed a
mine in West Africa for Alcoa Corp, said the same model
could be used in another reservoir in Peru, Olmos, which
Brookfield Infrastructure Partners LP recently bought
from Brazilian builder Odebrecht.
Kuczynski's office confirmed the accuracy of his comments.
The governor of Piura, Reynaldo Hilbck, said his
administration has been evaluating building smaller reservoirs
upriver to boost regional water supplies and that a proposal for
mining Poechos would have to be studied carefully.
"Poechos provides drinking water for five provinces in Piura
and irrigates 110,000 hectares of farmland," Hilbck said. "It's
the backbone of the economy."
Peru produced about 127 million grams of gold in the first
10 months of 2017, up 4 percent from the same period last year,
thanks to surging output from wildcat miners in a rainforest
region that offset dwindling production from Yanacocha.
Yanacocha produced some 17.2 million grams of gold in that
period, according to data from the energy and mines ministry.
The basis for Kuczynski's estimate of gold reserves in
Poechos was unclear.
Carlos Galvez, financial manager of Buenaventura and the
head of the country's mining association, said he was unaware of
any systemic drilling and sampling in Poechos and called
Kuczynski's proposal "aggressive."
(Reporting by Mitra Taj, Additional Reporting by Marco Aquino;
Editing by Leslie Adler and Dan Grebler)