Gold Fields aims for Peru expansion with acquisition targets “making sense”

Gold Fields CEO Chris Griffiths

GOLD Fields was considering acquiring new production in Peru as its only asset in the country, Cerro Corona, was nearing the end of mineable reserves.

“We would like to have a solution in Peru,” said Chris Griffith, CEO of Gold Fields during a presentation of the firm’s first quarter results on Thursday. “We are looking at assets and some make sense to us.”

Gold Fields had stockpiled material it could mine which would extend the economic life of Cerro Corona to about 2030 once fresh ore has been depleted, said Griffith. But he agreed with a question from an analyst that having a single mine per country was not optimal.

“We know Peru and we want to stay there; it’s not the best solution to have one asset per region and we’re looking to tackle that,” he said.

The group is currently 70% through the development of its 300,000 ounce a year, $860m Salares Norte project in Chile – the company’s only operational site in the country. The inference of Griffith’s comments is that Gold Fields is open to growth via acquisition.

Although its experience is with near-term production assets, there was a strategic interest in greenfields development as well. “We also want to expand our exploration footprint,” he said.

Griffith was also asked if Gold Fields would consider buying assets in North America. “We continue to look at operations, but it’s quite expensive to look at assets in the US and Canada,” he added.

Gold Fields has targeted production of about 2.8 million oz a year by the middle of the current decade before production smooths out to about 2.2 to 2.4 million oz/year. Griffith said the group could maintain this level through incremental organic resource replacement and through small acquisitions in lieu of more substantial dealmaking.

Regarding Gold Fields’ 50% investment in Asanko Gold Mines, a Ghana operation it shares with Toronto-listed Galiano Gold, Griffith said the aim was to go along with Galiano’s plan to mine stockpiles whilst it develops access to fresh ore, a process that could take 18 months.

Griffith previously raised the prospect of either divesting from Galiano or taking over operations. Asked about a third option of shutting the mine, he said: “There is no reason to close it down if we do the right things.

“We will give it enough time to find fresh ore but it will be extremely marginal over the next few years,” he said.