GOLD Fields Philippines Corporation paid $66 million to Lepanto Consolidated Mining Corporation to acquire the Far Southeast Gold Resources Inc. (FSGRI) project.
The payment represents the second tranche following the previous $10 million paid in 2010 for the mining project LCMC shares with Liberty Express Assets, which owns 40 percent of the FSGRI area, the company is a private off shore holding company.
September last year, Lepanto Consolidated Mining Corporation closed a deal with Gold Fields Ltd, a New Zealand mining firm. Gold Fields Ltd is seeking to gain a 60-percent interest in the Far Southeast mining claim under Far Southeast Gold.
Gold Fields is given 18 months to finish drilling operations to be able to make a feasibility study on the proposed mining site.
The non-refundable down payment of $66 million to Liberty is the second in a series of three. The first of $54 million, comprising $10 million in option fees to Lepanto and $44 million as a non-refundable down payment to Liberty, was paid with the signing of the option agreement in September 2010.
If Gold Fields decides to proceed with the acquisition of the 60-oppercent interest in FSE, the final payment of $220 million is expected to be paid during the first half of 2012. The total pre-agreed acquisition price for a 60-percent interest in FSE, inclusive of all of the above payments, is $340 million.
Following the signing of the option agreements, Gold Fields commenced with an extensive drilling programme and currently has eight underground drill rigs turning.
Initial results support the existence and extent of the known core of mineralisation, as well as further extensions both laterally and at depth beyond this core. The company is continuing with its underground drilling programme and has also commenced with surface geotechnical drilling during this quarter.
Gold Fields is one of the world’s largest unhedged producer of gold, with attributable annualised production of 3.6 million gold equivalent ounces from eight operating mines in Australia, Ghana, Peru and South Africa.
The project is situated in an existing mining camp in close proximity to two other mines historically operated by Lepanto in the municipality of Mankayan in Benguet where the existing workforce on the doorstep of FSE is part of a community established around mining over the past 70 years.
FSE has ready access to established infrastructure, including roads, tailings facilities, power and water.
Far Southeast Gold Resources Inc. was established in 1987 as a joint venture between LCMC and Galactic Resources Ltd, to further develop ore resources within the vicinity of Lepanto, Mankayan and nearby areas. -By Malen Catajan