[miningmx.com] – GOLD Fields has sold its 51% stake in the 6.1 million ounce Chucapaca project in Peru to its joint venture partner, Buenaventura, for $81m and a 1.5% royalty on the mine’s future sales of gold, copper and silver.
“The sale of our stake is in line with our strategy of focusing on growing cash flow and moving away from greenfields exploration and new project development as a strategy for growth, in favour of the acquisition of in-production ounces and near-mine exploration and development,’ said Gold Fields CEO, Nick Holland, in a statement.
Buenaventura is Peru’s largest publicly traded precious metals company and previously owned a 49% stake in Chucapaca.
Gold Fields had recouped its investment in the project which, at $81m, equated to $26.20 per attributable gold resource ounce – in line with the weighted average enterprise value of open-pit projects global, it said.
“The royalty agreement provides us with future upside, as we see Buenaventura, with its local expertise and experience, advancing this project fairly quickly,’ said Holland.
In June, Gold Fields sold its 85% interest in the Yanfolila project in Mali to Hummingbird Resources for $20m, to be paid for with the UK-listed firm’s shares. The South African gold producer has also quit its interest in the Talas project in Kyrgyzstan.
“This acquisition fits perfectly with Buenaventura’s expertise to develop underground mining operations that will permit the maximization of shareholders’ value, adding precious metal resources to our portfolio,’ said Roque Benavides, Chairman and CEO of Buenaventura in a statement.
In October last year, Gold Fields completed the $300m purchase of the Yilgarn South assets fro Barrick Gold Corporation.
Holland said earlier this year his company would spend $51m at the Australian mines, just over double the $25m it spent last year.
Commenting on buying producing or near-production assets, Holland said in May: “For the right deal, we can find ways to finance it’.
“We would look at bolt-ons, but not major transformational deals. We don’t want to waste good money on bad acquisitions; we would rather grow the cash,’ he said.
