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Johannesburg - Gold Fields [JSE:GFI] has agreed to sell its 51% stake in Canteras del Hallazgo (CDH), the company that manages the Chucapaca project in southern Peru, to its joint venture partner in the project, Compaa de Minas Buenaventura.
Buenaventura is Peru’s largest publicly traded, precious metals mining company and previously owned 49% in CDH.
The agreed sale price is $81m, 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.
At end-December 2013 Chucapaca had gold Mineral Resources of 6.1 million ounces.
The acquisition price of $81m and the royalty deal ensure Gold Fields’ investments in the project are recouped. The acquisition price equates to $26.20 per attributable gold resource ounce, which is in line with weighted average enterprise values of open-pit projects globally.
The sale of our stake is in line with the 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 $20m in the form of Hummingbird shares. Earlier this year it also disposed of its interest in the Talas project in Kyrgyzstan.
Roque Benavides, chair and CEO of Buenaventura, stated that 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," he said.
