Gold Fields sells its 51% stake in Peru's Chucapaca project to Buenaventura
Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) has agreed to sell its 51% stake in Canteras del Hallazgo S.A.C (CDH), the company that manages the Chucapaca project in southern Peru, to its joint venture partner in the project, Compañía de Minas Buenaventura S.A.A. (Buenaventura). Buenaventura is Peru’s largest publicly traded, precious metals mining company and previously owned 49% in CDH.
The agreed sale price is US$81-million, to be paid by Buenaventura concurrently with the execution of the agreement, and a 1.5% net smelter royalty on future sales of gold, copper and silver produced in the current Chucapaca concession.
Nick Holland, CEO of Gold Fields, said: "We are pleased to have agreed terms with Buenaventura to sell our controlling stake in Chucapaca. The royalty agreement provides us with future upside, as we see Buenaventura, with its local expertise and experience, advancing this project fairly quickly.”
At end-December 2013 Chucapaca had gold Mineral Resources of 6.1 million ounces.
The acquisition price of US$81-million and the royalty deal ensure Gold Fields’ investments in the project are recouped. The acquisition price equates to US$26,20 per attributable gold resource ounce, which is in line with weighted average enterprise values of open-pit projects globally.
Mr Holland added: “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.”
In June Gold Fields announced that it had sold its 85% interest in the Yanfolila project in Mali to London-listed Hummingbird Resources for US$20-million in the form of Hummingbird shares. Earlier this year it also disposed of its interest in the Talas project in Kyrgyzstan.
Roque Benavides, Chairman and CEO of Buenaventura, stated: “Chucapaca, as an underground mining project located in Peru, offers an important potential to continue growing in terms of gold resources and future production. 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.”
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