A Look at Peru and Opportunities in Gold Mining Sectors

Interview with Mr Dulguun Erdenebaatar the CEO and President of Boroo Pte Ltd, a privately-held investment holding company principally engaged in operating, developing and acquiring gold properties globally. Boroo owns and operates various production-stage and development-stage assets in Central Asia and South America and spoke to IN Diplomacy more about the mining sector in Peru and its plans in Asia

*Dulguun Erdenebaatar. CEO Boroo Mining. © Victor Idrogo / Icónica*

THE mining sector has always been an important part of Peru’s economy contributing 10% of the country’s total output and two-thirds of its export value. Copper, gold and silver are found extensively in the country as are other rare metals such as lithium. Gold Reserves in Peru currently stands at 34.68 tonnes in the first quarter of 2023. One Peruvian mining company represented in Singapore, Boroo Pte Ltd, is a privately-held investment holding company principally engaged in operating, developing and acquiring gold properties globally. Boroo owns and operates various production-stage and development-stage assets in Central Asia and South America and spoke to IN Diplomacy more about the mining sector in Peru and its plans in Asia.

Can you give us a brief introduction about the company and its connection to Peru and give some indication of size of its operation and success to date?
As a responsible emerging mining company, Boroo’s purpose is focused on pursuing international metal mining opportunities to grow and create value for our stakeholders while adhering to world class standards. Since acquiring our first assets in Mongolia from Centerra Gold in 2018, Boroo has proven its strategy of turning around undervalued mining operations and projects, achieving commercial production beginning 2019 and selling 163.2 Koz Au between 2019 and 2022, after Boroo Gold Mine was placed on care and maintenance in 2016. Subsequently we identified the opportunity to replicate and scale our strategy at the Lagunas Norte Mine in Peru, expanding our operations to South America.

In June 2021 Boroo completes the acquisition of the Lagunas Norte mine from Barrick Gold, since then we have initiated our plans to extend the life of the mine, achieving significant production improvements and placing our subsidiary company in Peru as the eighth largest gold producer in the country at the end of September 2023. Currently, the Company is in the process of obtaining environmental and sectoral permits to extend Lagunas Norte’s life of mine in a first phase until 2030.

What is your opinion about the general investment climate in Peru and then specifically the current and potential of the mining sector? Are there any factors that make the Peruvian mining industry stand out from rest of the world?
Peru is a country with a long mining tradition that comes complete with professional talent and specialized providers ecosystem. It is also one of the investment grade countries in Latin America, with a clear division of powers, regular elections and an institutional framework that has allowed it to overcome its main political issues and government changes. This includes an outstanding economic performance that according to the Peruvian Central Bank has allowed the country to grow at an average annual rate of 4.3% in the last two decades, doubling the Latin American average (2.2%), which is why there is confidence in the country’s ability to reverse recession situations.

Likewise, Peru stands out as the second best-placed country based on competitiveness indicators in the Latin American region according to the 2023 World Competitiveness Ranking report by the International Institute for Management Development (IMD), which offers an overview of the investment climate.

Among the main factors that differentiate Peru, it should be highlighted that mining has a great relevance in the country’s economy, representing 11% of GDP, 58% of exports and 20% of corporate income tax collection. Peru is also considered to have significant mining potential, having 9% of the world’s copper reserves by 2022, 6% in gold and 18% in silver by 2022.

Please share more about the work that Boroo is doing here to connect Singapore and Peru?
Singapore is recognized worldwide as a benchmark of prosperity, transparency and one of the largest financial centers, with a futuristic development vision. In Peru, there is also a positive perception of Singapore´s positioning, which is why at Boroo we strive to share our vision and strategy for generating long-term value in mining, as well as participating in transparency initiatives and good practices such as the Extractive Industries Transparency Initiative (EITI) at the country level and in the first global initiative at the level of subnational governments, focused in our hosts’ operations area.

In the same manner, I recently participated as speaker in Perumin 2023, one of the most important mining events in Latin America, sharing with other mining industry opinion leaders the Boroo´s management model and expertise, as a company based in Singapore with the objective to unlock value by extending the useful life of undervalued assets generating value for various stakeholders, making Singapore also visible as a potential development ally in Peru.

How successful has Boroo been so far in its objectives to “unlock value by extending the life of undervalued assets.”?
The Lagunas Norte mining unit is a traditional open-pit mining operation that has been in continuous operation since 2005, it was put into care and maintenance in 2019 with production only through secondary leaching. Under Boroo’s management, and with the implementation of optimization initiatives, year-on-year production increased by 115% between 2021 and 2022.

The plan is to finish the year 2023 by increasing gold ounces produced by 50% more, continuing a trend which started in 2022, thanks to the optimization of processes and the processing of minerals with carbonaceous content (CMOP) which will contribute to extending the life of Lagunas Norte mine by approximately six years.

What is your general view of Peru as an investment destination?
Peru continues to be one of the best evaluated countries in Latin America by the main rating companies as an investment destination. Although it faces political issues common to most Latin American countries, its government has a very defined balance of powers that provides political control and legal security for investors; it also has a solid macro economy based on low inflation (at the close of 2023, there will be 26 consecutive years of single-digit inflation), international reserves equivalent to 29.4% of GDP, controlled fiscal deficit (an average of 3.4% of GDP over the past five years), which makes Peru a resilient country.

Additionally, institutions as the National Mining Society, business and professional associations are permanently contributing to the mining industry recognition as a development generator and to an increasingly better investment climate. Likewise, Peru is fully committed to trade integration as the Andean Community, the Pacific Alliance, the Asia-Pacific Economic Cooperation (APEC), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).