Peruvian precious metals producer Compania de Minas Buenaventura SAA (BVN, BUENAVC1.VL) said Monday that it does not foresee any major setback to the development of the Minas Conga project as a result of community protests.

Buenaventura Chief Executive Roque Benavides said during a conference call that construction of Conga is continuing.

Conga is Peru's biggest mining project and will require an investment of $4 billion to $4.8 billion. Initial production is expected to begin in 2015. Average output during the first five years will be 580,000 to 680,000 ounces of gold and 155 million to 235 million pounds of copper.

Conga is being developed by gold producer Minera Yanacocha SRL, which is 43.7% owned by Buenaventura and 51.4% controlled by Newmont Mining Corp. (NEM).

Buenaventura said that Yanacocha, South America's biggest gold producer, is expected to produce 1.3 million ounces to 1.4 million ounces of gold in 2012.

Residents located near Conga held protests this month calling for the suspension of the project over concerns about its use of water and potential environmental impact.

Newmont's senior vice president for South America, Carlos Santa Cruz, said Monday that Conga will not impact the supply or quality of water for nearby residents.

"There is no problem related to water," Santa Cruz said during an interview with Radio Programas. He said that the protests are due to expectations from communities that are looking to benefit from the project.

"Everyone wants to participate and in some way receive part of the benefits from the project," Santa Cruz said.

Benavides said that a working group was set up on Friday to resolve community concerns and that the first meeting was "positive."

Buenaventura is Peru's biggest publicly traded precious-metals miner and operates several mines. It had equity production of 107,157 ounces of gold in the third quarter of 2011.

In addition to Yanacocha, the company also has a minority interest in base-metals mining company Sociedad Minera Cerro Verde SAA (CVERDEC1.VL).

Union workers at Cerro Verde have been on strike since Sept. 29 to back demands for higher pay. The company said last week that production of copper and molybdenum concentrates have not been significantly affected by the strike.

"We have received information on the negotiations with the labor union that we may have a positive outcome in the course of this week," Benavides said.

Cerro Verde is one of Peru's biggest copper producers. It produced 157 million pounds of copper in the third quarter of this year, down from 165 million pounds in the same period in 2010.

Freeport-McMoRan Copper & Gold Inc. (FCX) has a majority stake of Cerro Verde.

-By Ryan Dube, Dow Jones Newswires; 51-945 043 802; peru@dowjones.com

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