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.