March 22, 2012
Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) is pleased to announce that it has exercised its 40% option in the gold-copper Far Southeast Project in
after making a
payment this week.
20 September 2010
Gold Fields entered into two option agreements with Lepanto Consolidated Mining Company (Lepanto), 60% owner of Far Southeast, and Liberty Express Assets (Liberty), 40% owner of Far Southeast, granting Gold Fields an option to acquire a 60% interest in Far Southeast for a total consideration of
After making two down-payments of
respectively, Gold Fields has decided to bring forward half of the remaining
payment to acquire Liberty's 40% interest in Far Southeast.
Gold Fields continues to hold its option to acquire an additional 20% stake in Far Southeast from Lepanto for a further
, which, if exercised, would increase its total interest in Far Southeast to 60%.
The Liberty and Lepanto options were initially granted to Gold Fields for the later of 18 months from signature in
or the date of receiving a Financial or Technical Assistance Agreement (FTAA) for the project. A FTAA licence allows a foreign corporation to control a majority interest in a Philippine mining project.
Notwithstanding this provision, Gold Fields has the discretion to exercise either option prior to the FTAA being granted. Gold Fields has decided to exercise the Liberty option earlier than originally planned due to the fact that:
- The due diligence results to date are positive and demonstrate significant upside to the resource potential;
- By acquiring ownership of 40% it demonstrates its commitment to the project and formalises its partnership with Lepanto; and
- The early exercise of the Liberty option does not affect the remaining 20% Lepanto option, which continues to be exercisable in accordance with the terms of the agreement.
The FTAA application for the Far Southeast project was filed in
and based on the date of the filing Gold Fields expects it could be granted in the second half of 2012. Gold Fields also expects to have a maiden Resource statement for Far Southeast and commence a pre-feasibility study later this year.
, Gold Fields CEO, commented: "We are extremely pleased that we now own a 40% interest in Far Southeast, not just an option. The positive drilling results have given us the confidence to show our commitment to the project and
Far Southeast is located in the northern part of Luzon, the largest island in
. The project is situated in an existing mining camp in close proximity to two other mines historically operated by Lepanto, one of which is currently in production. Far Southeast has ready access to established infrastructure, including roads, tailings facilities, power and water. The existing workforce on the doorstep of Far Southeast is part of a community established around mining over the past 70 years.
Notes to editors