[miningmx.com] — GOLD Fields said on Thursday its gold and copper prospect in the Philippines, Far Southeast, may be similar in scale to Harmony Gold’s much acclaimed Wafi-Golpu resource in Papua New Guinea.
Gold Fields in March increased its shareholding in 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.
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.
“Far Southeast will probably be the lowest cost producer of the group,’ McKeith said. “That’s the best way for us to defend ourselves against the falling [gold] price.’
