Gold Fields Expedites $340 Million Philippines Deal
GOLD Fields said it would pay $110m to secure a 40% stake in the Philippines-based copper and gold prospect, Far Southeast Project.
“The positive drilling results have given us the confidence to show our commitment to the project and the Philippines,” said Nick Holland, CEO of Gold Fields, in an announcement. Gold Fields brought forward part of an option to acquire the shares, having already made a downpayment of $100m. On payment of another $110m, Gold Fields stands to become a 60% shareholder in the project.
The shares were bought from Liberty Express Assets, making it a partner now with long-standing Philippines investor, Lepanto Consolidated Mining Company, with whom it has the option to buy another 20% in Far Southeast Project.
Reuters, citing sources, reported in September last year that the project could see Gold Fields invest some R2bn developing the project. Gold Fields has said it’s too early to allocate capital budgets for a project in which there is no official resource statement at present.
However, the South Africans said due diligence results had been “positive” to date and demonstrated “significant upside to the resource potential”.
It was partly owing to resource confidence that Gold Fields secured a direct stake in the project ahead of receiving a mining licence, known in the Philippines as a Financial or Technical Assistance Agreement (FTAA). The FTAA, which enables foreign- owned companies to take a majority stake in local assets, was expected to be granted in the second half of 2012, Gold Fields said.
“Gold Fields also expects to have a maiden resource statement for Far Southeast and commence a pre-feasibility study later this year,” it said.
“We are extremely pleased that we now own a 40% interest in Far Southeast, not just an option,” said Holland.
The project is in the northern part of the country’s main Luzon island, and Gold Fields said it “has ready access to established infrastructure, including roads, tailings facilities, power and water”.
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