Business Context and Reporting Period
This Form 6-K filing by Gold Fields Limited (Gold Fields) is dated May 11, 2010. The report details a major exploration milestone at the Chucapaca Project Area (CPA) in southern Peru, a joint venture between Gold Fields (51% interest) and Compañía de Minas Buenaventura S.A.A. (49% interest). The announcement focuses on the discovery of the Canahuire gold-copper-silver deposit.
Key Financial and Operational Metrics
The filing does not provide consolidated revenue, profit, cash flow, or debt figures for Gold Fields. It focuses exclusively on the technical and resource metrics of the new discovery:
- Resource Estimate: 5.6 million gold equivalent ounces (AuEq).
- Tonnage: 83.7 million tonnes (Mt).
- Grades: 1.9 g/t gold, 0.09% copper, and 8.2 g/t silver.
- Attributable Resources: 2.9 Moz AuEq for Gold Fields and 2.8 Moz AuEq for Buenaventura.
- Price Assumptions: US$1,150/oz gold, US$3.00/lb copper, US$17/oz silver.
- Recovery Assumptions: 77% gold, 82% copper, 44% silver.
Material Changes and Project Status
The primary material change is the delineation of the Canahuire Inferred Mineral Resource within 18 months of the first drill hole. The deposit is located in the Altiplano area of southern Peru, 120 km northeast of Moquegua. The resource is reported under the SAMREC code and is not yet classified as a Mineral Reserve, meaning economic viability has not been demonstrated. The joint venture company, Canteras del Hallazgo S.A.C (CDH), has filed a modification to its Environmental Impact Assessment to permit expanded activities.
Guidance, Outlook, and Risks
Outlook and Timeline:
- An interim scoping study is on track for completion by June 2010.
- Subject to a positive economic outcome, a pre-feasibility study is scheduled to commence in July 2010.
- Drilling activities to define extensions of mineralisation are expected to recommence by July 2010 pending permitting approval.
Management Commentary: CEO Nick Holland described the discovery as "highly promising" with significant upside potential. Executive Vice President Tommy McKeith called the resource delineation a "remarkable achievement."
Risks and Contingencies:
- Regulatory: Further drilling is contingent on approval from the Peru Ministry of Energy and Mines.
- Economic: The resource is sensitive to metal prices; a 25% decrease in pricing would result in a 13.0% decrease in resource tonnes.
- SEC Disclosure: The filing explicitly notes that "Mineral Resources" are not "Mineral Reserves" and do not have demonstrated economic viability, a distinction strictly enforced by SEC guidelines.
Key Facts for Investor Verification
- Verify the status of the Environmental Impact Assessment modification with the Peru Ministry of Energy and Mines.
- Monitor the results of the interim scoping study expected in June 2010 to assess economic viability.
- Confirm the timeline for the pre-feasibility study, which is conditional on the scoping study's outcome.
- Review the sensitivity analysis regarding metal price fluctuations and their impact on the resource tonnage.
- Check for updates on community agreements in the Moquegua region to ensure social license to operate remains intact.