S African mining firm plans to invest $800 M in Phl

MANILA, Philippines - The South African Gold Fields Group plans to invest $800 million in the Philippines over a five-year period, Mines and Geosciences Bureau director Leo Jasareno said yesterday.

In an interview at the opening yesterday of the Mining Philippines 2011 exhibit at the Sofitel Hotel in Pasay City, Jasareno said they expect the South African mining group to seek an FTAA (financial and technical assistance agreement shortly.

Jasareno said Gold Fields is now actively “moving” on its planned investments in the Philippines, particularly its stake in Lepanto Consolidated Mining Co.’s Far Southeast Gold Resources, Inc. (FSGRI).

The Gold Fields Group, through its subsidiary Gold Fields Limited, has signed an option agreement with Lepanto to acquire a 20-percent stake in FSGRI.

Jasareno said Gold Fields’ interest in the FSGRI has been there for some time. However, in the past, Gold Fields’ interest was tempered by the deep location of FSGRI’s ore body.

But with the current high metal prices and the improvement in technology, Jasareno said, Gold Fields is now “moving” on the project.

Thus, Jasareno said, applying for an FTAA would make “business sense” for Gold Fields since an FTAA “requires an investment of at least $50 million.” Gold Fields’ interest in FSGRI has in the past couple of months lifted the stock price of Lepanto, making it the current “darling” of the local stock market.

According to Jasareno, the country’s mining investment target for this year of $1.4 billion could easily double to $2.8 billion, if Chinese investments come in before the end of this year.

Jasareno said there is a “50-50” chance that a couple of big Chinese mining investments could come in before the end of the year. If those investments come in, Jasareno said, “our investment target for this year of $1.4 billion could easily doule.”

As of the first half of this year, Jasareno said, “we are 40 percent on-track with our target.”

Jasareno said many Chinese investors are interested in nickel, iron and manganese.

One investment alone in a nickel mine, including processing, Jasareno said, would involve an investment of $1 billion.

Jasareno noted that “almost everyday there are queries from Chinese firms.”

At least four Chinese firms signed separate memorandums of understanding (MOUs) with the Philippines during President Aquino’s recent State Visit to China.

Jasareno said a large-scale mining project would be in the magnitude of $100 million to $200 million.