South African miner Gold Fields has accelerated its investment in a Philippines gold-copper deposit, with a US$110 million share in the second of three tranches. This early payment will bring Gold Fields’ stake in the project to 40%.
The move is part of the company’s strategy to diversify risk from its home base. It also plans to have five million ounces of gold either in production or under development by 2015. Gold Fields already has 2 million ounces from its South African projects, with 1 million ounces to come from each of the three regions in which the company operates – West Africa, South America and Australasia.
The Far South East Gold Project is a joint venture between Lepanto Consolidated Mining and Liberty Express Assets, whose 40% stake has now been bought out by Gold Fields. Lepanto will remain a project partner.
Gold Fields’ chief executive officer Nick Holland says, “We are extremely pleased that we now own a 40% interest in Far South East, not just an option.”
Gold Fields plans to buy another 20% in the project for a total investment of $340 million. The final payment is contingent on securing a financial or technical assistance agreement that would allow a foreign company to own a majority stake in a mining project in the Philippines.
The company wants to mine an unexploited ore body below a mine at the site which is nearing its life end. Eight drill rigs are currently working at the site to define a resource of 52 million gold equivalent ounces.
“The positive drilling results have given us the confidence to show our commitment to the project and the Philippines. The due diligence results to date are positive and they demonstrate significant upside to the resource potential,” says Nick Holland.
An initial resource estimate for the project is expected during the second half of this year at which time a pre-feasibility study will be started, and the company says it hopes a mine could be constructed during 2015-16.
The Far South East project is in the northern part of Luzon, which is the Philippines’ largest island. The project is in an existing mining camp in close proximity to two other mines historically operated by Lepanto, one of which is currently in production. It has ready access to established infrastructure, including roads, tailings facilities, power and water. Gold Fields says the existing workforce is part of a community established around mining during the past 70 years.