South African gold producer Gold Fields is currently in the process
of acquiring a gold-and-copper project in Peru, in an attempt to
gain a foothold in South America, as part of its growth and
geographical diversification strategy.
At the end of last year, the company announced that it had signed
an agreement to buy 92% of the voting shares of Sociedad Minera La
Cima, subject to certain conditions.
CEO Ian Cockerill said yesterday, at the company’s December
quarter financial results presentation, that this move was in line
with Gold Fields’ bid to acquire 1,5-million new gold ounces
in US dollar-denominated countries, within five years.
The drive for UScrushing mobile track dollar-denominated ounces, Cockerill explained,
stems from the likelihood that not only the gold price would remain
firm, but also commodity currencies, such as the South African rand
and Australian dollar.
The Sociedad Minera La Cima deal, a private transaction with
various members of the Gubbins family, should add about 147 000 oz
of gold and 65-million pounds of copper (280 000 oz of gold
equivalent) a quarry equipment crusher sandyear to Gold Fields’ production figures.
Sociedad Minera La Cima owns the Cerro Corona project, a
gold-and-copper project in Peru’s highly-prospective gold
belt, as well as other mineral properties.
A feasibility study suggested that, during phase 1 of the project,
total operating costs would amount to $212/oz of gold equivalent or
$0,48/lb of copper equivalent (basequarry with crusher price in canadad on a gold price of $360/oz and
a copper price of 80c/lb).
Cockerill said the value of the transaction would only be revealed
once a due-diligence study into the second phase of the project is
concluded at the end of February and necessary surface rights
should be finalised by June 30. This phase could potentially double
production.
However, it is understood that Gold Fields will spend some
R120-million on the project, which would be the South African gold
giant’s first operational exposure in South America, a base
from which it intends to grow in the region.
Also in line with Gold Fields’ international growth strategy
is its strategic partnership with Chinese company Fujian Zijin
Mining Industry, to explore and develop gold-mines in China.
The Fujian joint venture, in which Gold Fields holds a 2% stake in
the Chinese firm, complements an exploration joint venture with
Sino Mining, in the Shandong Province of China.
“We are positioning ourselves in China with credible
partners,” Cockerill pointed out, adding that Chinese
projects are attractive due to the low operating costs, high
productivity and high grades.
Zijin is one of China’s biggest gold producers, which owns
the Zijinshan gold-mine, China’s biggest gold-producing mine,
which produces about 300 000 oz/y.
Another international project that Gold Fields is currently
involved with is the Arctic Platinum Project (APP), which consists
of two large-tonnage openpittable deposits, Kontijarvi and
Ahmavaara, at the Suhanko project, in northern Finland.
Second-quarter activity focused on Kontijarvi, with detailed infill
drilling and detailed exploration and mapping of geology.
Third-quarter activity will focus on Ahmavaara.
Feasibility study-type work has to be completed and an investment
decision will be made by the end of the year.
Gold Fields also announced a joint venture option with Bolivar Gold
Corp to earn up to 60% in the Monte Ollasteddu prospect, in
southeast Sardinia.
“The best value-add is growth of your own projects and
successful exploration. It’s even better if you add good
acquisitions to this,” said Cockerill.