Gold bars and granules. File photo: Reuters

Lima - Peruvian miner Buenaventura is taking full control of the Chucapaca gold deposit in southern Peru by buying a 51 percent stake in the project from its South African partner Gold Fields, the company said.

Buenaventura owned a 49 percent stake in southern Peru's Chucapaca deposit before starting the acquisition, which will cost $81 million (R862 million) in cash plus royalty payments, the miner said in a statement late on Monday.

Chucapaca has been estimated to produce 500,000 ounces of gold per year once up and running.

Buenaventura said that it will develop the deposit as an underground mine, instead of as an open-pit project that the two companies once deemed too costly.

Gold Fields previously put the cost of investing in Chucapaca at more than $1.2 billion.

Buenaventura is one of Peru's biggest precious metals mining companies.

It also owns a 43.7 stake in Newmont Mining Corp's aging Yanacocha gold mine in northern Peru.

A $5 billion proposed gold mine that would help offset Yanacocha's dwindling deposits has been stalled since 2011 because of local opposition. - Reuters