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.
Gerald Group resolves iron ore dispute with Sierra Leone
Gerald Group, the US commodity trader, will pay Sierra Leone $20mn and cede a 10% stake in an iron ore project as part of the resolution to a nearly two-year dispute that led to the shutdown of production, the two sides revealed.
Gerald's wholly-owned subsidiary SL Mining filed for arbitration in August 2019 over a royalty payment dispute and suspended the Marampa mine the following month. Sierra Leone's government responded by cancelling its mining licence.
As part of the agreement signed on Friday, Sierra Leone will take a non-dilutable 10% stake in a new company that will replace SL Mining and resume operations at Marampa by June 1, Gerald said in a statement.
Gerald will make two $10mn payments this year and will have the immediate right to ship its current stockpile of about 707,000 tonnes of iron ore, it said.
Both sides will withdraw their legal claims before the International Chamber of Commerce (ICC) and International Centre for Settlement of Investment Disputes (ICSID), the statement added.
Gerald’s chairman and CEO Craig Dean commented: "I am delighted that we have been able to resolve our differences and have a fresh start and new beginning with the government of Sierra Leone."
Sierra Leone's Mines Minister Timothy Kabba told a news conference on Tuesday that the agreement was a milestone for the country.
"Whatever the pain we may have borne or dreaded throughout these two years ... this outcome justifies our action," he said.
Gerald estimates that Marampa holds about 1 billion tonnes of iron ore with a potential lifespan of 30 years.
Back in 2019, Dean spoke with Mining about the development of Marampa and commented: "SL Mining offers a substantial opportunity for Gerald Group as our Marampa mine in Sierra Leone is set to deliver six million tonnes of high-grade iron ore during its operational life. If you analyse the iron ore market it has transformed, even from a couple of years ago when prices were very low. Now prices have stabilised we’re in a favourable position with our first shipments leaving for China.
"Our goal is to make ‘Marampa Blue’ an internationally recognised premium grade iron ore brand. We intend to expand the delivery of high-grade 65% iron ore concentrate to markets in Europe and Africa.”