Gold Fields seen to exercise option in Phl mining project

MANILA, Philippines -  Gold Fields Ltd expects to exercise its option to take 60 percent of the Far Southeast gold-copper deposit in the Philippines in the second half when Lepanto Consolidated Mining Co. is seen to obtain its Financial or Technical Assistance Agreement (FTAA) for the project.

The acquisition of a FTAA license allows a foreign corporation to legally own and control a majority stake of any large-scale mineral resource in the Philippines.

“The FTAA is expected to be granted in the second half of 2012, following which, it is anticipated that Gold Fields will exercise the option and make payment of the final installment of $220 million to acquire 60 percent of FSE,” Gold Fields said in its financial report.

Gold Fields will reconduct underground drilling program next month and complete initial resource estimate in the second semester.

The Far Southeast mine, located in the central Cordillera of Northern Luzon , is rated as exceptional on a global basis for both its gold and copper endowment and abundance of quality deposits.

In September 2010, Gold Fields inked an option agreement with Lepanto to acquire a 60 percent interest in Far Southeast over a three staged payment scheme amounting to $340 million by March 2012.

The mine is in close proximity to two other mines (Enargite and Victoria) operated by Lepanto, of which Victoria is in current production.

There is no current declared mineral resource for FSE, although drilling completed over a number of years indicates the presence of a large, concealed gold-copper mineralized porphyry system.

Gold Fields is targeting a 900 million ton orebody grading 0.77 grams per ton gold and 0.54 percent copper per ton.  

Listed on the New York Stock Exchange, Gold Fields has total attributable gold equivalent mineral reserves of 76.7 million ounces and mineral resources of 225.4 million ounces.