Gold Fields Ltd. has entered into option agreements with Lepanto Consolidated Mining Co. and Liberty Express Assets, a private holding company, to acquire a 60% interest in the undeveloped Far Southeast gold-copper deposit on Luzon Island in the Philippines.
The agreements provide Gold Fields with an 18-month option on Far Southeast, during which time the company will conduct a major drilling program as part of a feasibility study. Gold Fields is required to pay $10 million in option fees to Lepanto and $44 million as a non-refundable down-payment to Liberty upon signing of the option agreements.
Should Gold Fields, after a 12-month period, decide to proceed with the acquisition of the 60% interest in the Far Southeast project, a further non-refundable down-payment of $66 million will be payable to Liberty, with a final payment of $220 million payable at the expiration of the option period. The total pre-agreed acquisition price for a 60% interest in the project, inclusive of all of the above payments, is $340 million.
The Far Southeast project is located in northern Luzon, 250 km north of Manila, and in close proximity to two other mines historically operated by Lepanto, one of which is currently in production. The project has ready access to established infrastructure, including roads, tailings facilities, power and water.
Work at Far Southeast to date has not been sufficient to support a mineral resource estimate; however, Gold Fields reports drilling undertaken over a number of years indicates the presence of a large, concealed gold-copper mineralized porphyry system.