Boroo reconfiguring formerly unloved gold mines into profitable operations

Mining Journal speaks with Boroo CEO Dulguun Erdenebaatar about the company's latest projects.


Boroo Pte Ltd may be a relatively young company, but it has a "very aggressive plan" to become a mid-tier gold producer in the next three to five years, according to chief executive Dulguun Erdenebaatar.

The privately held, Singapore-based company is pursuing its goal in a methodical manner: first, through the acquisition of mines put on care and maintenance by mid-tiers or majors; then, by restarting these mines with as little capital expenditure as possible, using the cash flow to fund refurbishments and expansions.

This strategy has seen the company acquire two assets thus far: the Boroo gold mine and processing facility in northern Mongolia, purchased from Centerra Gold for $35 million in October 2018; and the Lagunas Norte gold mine and processing facility in northwestern Peru, purchased from Barrick Gold in June 2021 in exchange for a commitment to pay $81 million over a period of at least two years and grant Barrick a 2% net smelter return. Lagunas Norte is currently the main focus for Boroo.

"I like to call our company a startup gold mining company. We don't consider ourselves a junior. We have considerable producing assets. Running a care and maintenance operation into full production is nothing compared to building a mine from a greenfield project, so it gives us a lot of advantages to achieve good cash flow generation within a short period of time," Dulguun said.

Originally known as OZD Asia, Boroo was founded by a group of commodity traders for the purpose of investing in high-quality gold and copper assets. Dulguun, a specialist in mining sector mergers and acquisitions, was appointed CEO in 2018 following the acquisition of the Boroo mine.

The Boroo mine commenced production in 2003, producing 1.8 million ounces of gold until Centerra Gold put it on care and maintenance in 2015. Boroo succeeded in restarting the heap leach operation within four months of purchasing the asset. Within 10 months it re-commissioned the 5,500 tonne-per-day carbon-in-leach (CIL) processing plant, enabling it to generate all-important cash flow.

The success of the Boroo mine restart was all the encouragement the company's leadership team needed to pursue other assets, eventuating in the Lagunas Norte acquisition.

"Barrick has its tier-one policy of focusing only on the most important assets, so we had the opportunity to acquire the Lagunas Norte asset back in early 2021," Dulguun said.

"Our business model is quite simple. We're trying to get assets that are on care and maintenance, because they have great infrastructure, human resources, and are well established. We are able to (achieve) net cash positive generation from these assets within a short period of time. That is our strategy that we are trying to copy and replicate in Peru.

"What we have done at the Boroo mine  and are trying to do in Lagunas Norte is to try to squeeze the project capex and to optimise the operation costs of the existing operation. Care and maintenance feeds our strategy, in that it is getting difficult to build new mines, especially from a social licence perspective. Infrastructure is a big cost for a (greenfield) project, and so (acquiring) a care-and-maintenance operation saves a lot of money. Expansion involves a relatively de-risked approach to restart the project and to try to scale up the production level, so that is what we're pursuing right now."

Barrick Gold produced 10 million ounces of gold at Lagunas Norte between 2005 and 2019, when it put the mine on care and maintenance. One of the first things Boroo did after acquiring the mine was to update the 43-101 technical report. The new 43-101 outlines an additional 4.2 Moz of gold production over a mine life of 20 to 23 years.

Boroo has already restarted production from the existing heap leach operation at a rate of 60,000 ounces of gold per year. The next phase in its plan for Lagunas Norte is the Carbonaceous Material Optimization Project (CMOP), which will involve the processing of about 15 million tonnes of high-grade gold-bearing oxides that were stockpiled by Barrick over the years, and which Boroo anticipates will increase total annual production to around 160,000-170,000oz gold per year. Testwork has indicated that good recovery could be achieved by using a carbon classification system to separate out constituent coal from the oxides and thereby prevent a phenomenon known as preg-robbing, which occurs when gold that can be otherwise recovered is lost through adsorption, reduction or absorption by carbonaceous compounds.

Boroo has tasked Golder Associates, a subsidiary of WSP Global, with managing all the basic and detailed engineering of the CMOP. An update to the CMOP feasibility study by Golder reduced the capital costs the $220 million outlined in Barrick's original study to $140 million. The updated study estimates an internal rate of return of more than 50% and payback period of less than years.

The partners are targeting construction of a grinding and CIL circuit in January 2022 and first gold pour from the CMOP by the December quarter 2022, which would give Boroo "good scale and good cash generation" from the Lagunas Norte operation, according to Dulguun.

"As a small company with an agile approach to execution, we are able to squeeze the costs, which also contributes to improving the economics of the CMOP," he said.

"The carbonaceous materials that Barrick had mined were not suitable for processing through the existing heap leach plant. That's why there's already a mined stockpile which we're going to feed through the new plant. In terms of the resource and reserve - which is 1.3 Moz Au at 2.4g/t - it's pretty much de-risked because it's based on the last drill data, and also in terms of the cost there is no mining needed for the stockpile."

Boroo views Lagunas Norte as its flagship operation and as key to establishing itself as a mid-tier precious metals producer. It has 12 exploration properties in the vicinity of the mine and is aiming to discover 1 million ounces of measured resources within three years and discovery cost of less than $10 per ounce.

On the corporate front, Boroo recently published an ESG report covering both its Peruvian and Mongolian assets. The report notes that the closest community to Lagunas Norte is approximately 500 metres from the perimeter fence, though most are located at more than 2 km distance. Community support strategies will include measures to improve access to employment opportunities, direct healthcare, potable water and improved nutrition.

Dulguun acknowledged that capital raisings would be essential to becoming a mid-tier producer, and he said Boroo was looking at "different strategic opportunities" to go public, such as a possible listing on the Toronto Stock Exchange.

"As a new company we need to show interested investors that we are a team with a proven capability and experience. So we are trying to bring very tangible results before we go public."

Boroo Pte

Boroo is an employee-oriented, result-focused multicultural mining company with a strong portfolio of operating, advanced development, and exploration assets across the world.


A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.


Mining Journal Intelligence Project Pipeline Handbook 2024

View our 50 top mining projects, handpicked using a unique, objective selection process from a database of 450+ global assets.


Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.


Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.


Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.