Gold Fields Sells Stake in Peruvian Chucpaca Project
Mining company Gold Fields Limited (JSE:GFI) has agreed to sell its 51 percent stake in the Chucapaca exploration project in Peru. The company will sell its portion of the project to joint venture partner Compañía de Minas Buenaventura S.A.A. (Buenaventura) for $81 million.
"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 favor of the acquisition of in-production ounces and near-mine exploration and development," said Gold Fields CEO Nick Holland.
The deal will allow the South African miner to recoup its investment in the project.
In addition to the sale, Gold Fields will hold onto a 1.5 percent net smelter royalty on sales of gold, copper and silver from the Chucapaca concession area.
"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," said Holland.
The Chucapaca project is estimated to contain gold Mineral Resources of 6.1 million ounces.
Buenaventura, which is Peru’s largest publicly traded, precious metals mining company, will transform the deposit from an open-pit project into an underground mine.
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."
Earlier this year, Gold Fields announced it had sold its 85 percent stake in the Yanfolila project in Mali to UK-based Hummingbird Resources for $20 million.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.