REPORT: Gold Fields Production Results; New Project Estimated “Gold Equivalent Metal Content” 50 Million Ounces

JOHANNESBURG - Gold Fields Limited (NYSE & JSE: GFI) announced [In the March 2012 quarter] attributable Group production of 827,000 gold equivalent ounces, similar to the corresponding quarter a year ago [Q1 2011: 830,000 gold equivalent ounces] and 6 per cent lower than in the December 2011 quarter of 883,000 ounces.

Gold Fields in March increased its shareholding in [gold and copper prospect in the Philippines] Far Southeast to 40% – for which it had paid $230m in total – and has the option to acquire an additional 20% stake for $110m. The project’s holding company is in the process of measuring the resource Far Southeast, that may be similar in scale to Harmony Gold’s much acclaimed Wafi-Golpu resource in Papua New Guinea.

The fourth-largest producer of the metal target’s 3.5 million ounces in 2012, compared with a previous range of 3.5 million to 3.7 million ounces, Chief Executive Officer Nick Holland said today in an interview in Johannesburg.

“Instead of being somewhere in the range, we think now we’re going to be at the bottom of the range,” he said.

March 2012 quarter salient features:

• Group attributable equivalent gold production of 827,000 ounces;
• Total cash cost of US$870 per ounce;
• Operating margin of 48 per cent and NCE margin of 24 per cent; and
• Project pipeline continues to advance.

Tommy McKeith, Head of Growth and International Projects at Gold Fields, said the porphyry system project has an exploration target of 900 million tonnes (Mt) with a gold equivalent metal content of over 50 million ounces. As in the case of Wafi-Golpu, the resource contains copper as co-product.

“That’s our target,” McKeith said. “This porphyry is a kilometre in diameter so it’s a big porphyry system and very high grade as far as these systems go. It is how big you want it to be.

“That exploration target will be more than adequate for us to commit to a capital programme for a big mining operation.”

Drawing a comparison to Harmony Gold’s Wafi-Golpu project in Papua New Guinea, McKeith said Far Southeast was “very similar in scale to the resource they [Harmony] have announced”.

“But ours is still a target, it is not a resource,” he said.

Harmony Gold has labelled its Wafi-Golpu joint venture as a game changer with a measured resource base of more than one billion tonnes.

The project is currently in the pre-feasibility phase, with a capex estimate ranging between $3bn and $5bn.

Gold Fields, meanwhile, would be following the regulatory process necessary for foreign mining companies to become majority shareholders in Filipino mining projects prior to acquiring the additional 20% stake.

McKeith said Far Southeast would form part of Gold Fields’ target of achieving five million ounces per year, either production or in development, by the end of 2015. For 2012, the company has a production guidance of 3.5 million ounces.

McKeith said the expansion of South Deep to 700,000oz per year would add an additional contribution of 400,000 oz to the group’s annual output.

A feasibility study at Chucapaca, a joint venture project in Peru, is due to be completed later this year and is expected to add another 250,000oz to 300,000oz to the Gold Fields profile.

“Hopefully we’ll have Arctic Platinum (in Finland) and Far Southeast in development at that stage,” McKeith said. “Those ounces will easily take us past the five million ounces target.”

McKeith said all of Gold Fields growth projects would be high margin operations and provide “a much bigger cushion to protect ourselves in lower gold price environment”.

He said Chucapaca would have similar cost perimeters to Cerro Corona, Gold Fields’ other operation in Peru. The mine, which also produces copper as a co-product, recorded total cash costs of $534/oz during the March-quarter.

“Our product is gold and our core business is to find and mine gold. While we are happy to mine any other metal or mineral that one often finds together with gold, such as copper, uranium or silver, our main business is gold mining.”   GOLD Fields said

FULL REPORT: [ goldfields.co.za ]

Source: [ miningmx.com ]

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Posted by WoodlawnPost on May 18 2012. Filed under Africa, Asia, Media. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.