Extra place by ancient city in South America (7)
I believe the answer is:
surplus
'extra' is the definition.
(synonyms)
'city in south america' is the wordplay.
'city' becomes 'Ur'.
'in' is an insertion indicator.
'south' becomes 'spl' (I am not sure about this - if you are sure you should believe this answer much more).
'america' becomes 'US' (abbreviation for the United States).
'ur' placed into 'spl' is 'surpl'.
'surpl'+'us'='SURPLUS'
'place by ancient' acts as a link.
This may not be correct. Some or all of it may be part of another bit of the clue.
(Other definitions for surplus that I've seen before include "unnecessary" , "(An) oversupply" , "Excess, extra" , "Amount left over" , "Unneeded extra" .)