Gold Fields remains keen on Phl prospects

MANILA, Philippines - The local unit of South African-led Gold Fields Ltd. remains optimistic on the prospects of the Far Southeast gold project in Benguet even as it remains silent about its investment in Lepanto Consolidated Mining Co. which holds the right to the FSE project.

“There are a variety of ways to mine...Any way of mining it (Far Southeast) is good,” Brett Mattison, president and chief executive officer of Gold Fields Philippines said at the Philippine Mining Luncheon held yesterday.

He said the FSE mine has vast mineralization and the ore body could be considered a “monster ore body”.

“There is continuity between the mineralizations and that is exciting,” he said.

He said Gold Fields intends to explore 52 million ounces of gold in the site, by drilling 900 meters below the surface at 0.77 gram per ton of gold.

The firm, he said, is hopeful that an application for a financial or technical assistance agreement (FTAA) for the project would be granted by the government.

The FTAA is a license which allows a foreign corporation to legally own and control a majority stake in large-scale mineral resources in the Philippines.

In March, Gold Fields acquired a 40 percent interest in the Far Southeast project by making a $110 down-payment to Liberty Express Assets under an option agreement.

Gold Fields entered into two option agreements in September 2010 to buy 60 percent of the Far Southeast Project for a total consideration of $340 million.

The first option agreement was signed with Liberty Express which has a 40 percent stake in the Far Southeast project, while another deal was signed with Lepanto Consolidated Mining Co. which owns 60 percent of the project.

By entering into the option agreement, Gold Fields made its first down payment for the acquisition comprising $10 million in option fees to Lepanto and $44 million to Liberty.

In September last year, Gold Fields made the second down payment of $66 million for the acquisition.

To bring its total interest in the Far Southeast project to 60 percent, Gold Fields has to acquire an additional 20 percent stake by paying another $110 million to Lepanto.

However, the government must grant the FTAA for the project before Gold Fields decides to exercise the option to bring its total interest in the project to 60 percent.

Gold Fields said earlier it expects to exercise the option to acquire an additional 20 percent stake when the FTAA application for the project is granted by the government in the second-half of the year.

The FTAA application for the project was filed by Lepanto in November last year.

Gold Fields is one of the world’s biggest gold producers. Apart from South Africa, it has mine in Peru, Ghana and Australia.