South African mining giant Gold Fields Ltd buy 60 percent gold and copper deposit in the Philippines.

South African mining giant Gold Fields Ltd buy 60 percent gold and copper deposit in the Philippines.

Philippines - South African mining giant Gold Fields Ltd. said it would exercise its option to buy 60 percent of the undeveloped Far Southeast gold and copper deposit in the Philippines.

Gold Fields had signed in 2010 an option agreement with Lepanto Consolidated Mining Co. to take a 60 percent interest in project for $340 million. The mine, located in the Benguet province in northern Luzon, is considered highly prospective and sits between the Enargite copper mine and Victoria gold mine, both owned by Lepanto.

“It is anticipated that Gold Fields will exercise the option and make payment of the final installment of $220 million to acquire 60 percent,” Gold Fields said in its 2011 financial results presentation.

Lepanto has already made payments to Lepanto of $120 million following positive drill results.

The drill results showed the presence of a large, concealed gold-copper system at the Far Southeast project.

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

Aside from this, Gold Fields is looking at acquiring the Mankayan copper-gold project in Benguet for $70 million. The project is adjacent to the Far Southeast project.

Should Gold Fields decide to exercise its option on both projects, the South African mining giant will corner a big chunk of the so-called Mankayan-Lepanto gold district.

Lepanto’s ongoing Victoria gold project has one of the three known ore bodies in the same gold district.

Gold Fields has about a year to conduct due diligence in Mankayan and may exercise its option in the project any time until Jan. 31, 2013.

Gold Fields is one of the world’s largest unhedged producers of gold with attributable annualized production of 3.5 million gold equivalent ounces from eight operating mines in Australia, Ghana, Peru and South Africa.

It has total attributable gold equivalent mineral reserves of 76.7 million ounces and mineral resources of 225.4 million ounces.

Gold Fields is listed on the JSE Ltd., the New York Stock Exchange, NASDAQ Dubai Ltd., Euronext in Brussels and the Swiss Exchange.

Gold Fields, in 2010, had entered into an option agreements with Lepanto Consolidated Mining Company (Lepanto) and Liberty Express Assets, a private holding company, to acquire a 60 percent interest in the undeveloped gold-copper FSE deposit in the Philippines.

The agreements provide Gold Fields with an 18-month option on FSE, during which time Gold Fields will conduct a major drilling program as part of a feasibility study on FSE.

Gold Fields has already paid $10 million in option fees to Lepanto and $44 million as a non-refundable down-payment to Liberty upon signing of the option agreements.

Gold Fields, after the 12-month period, decided to proceed with the option agreements and paid a further non-refundable downpayment of $66 million to Liberty, with the final payment of $220 million payable at the expiration of the option period in March this year.

The total pre-agreed acquisition price for a 60 percent interest in FSE, inclusive of all of the above payments, is $340 million......RESOURCES

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