Gold Fields denies mine sale

GOLD Fields has played down reports that it is selling its Darlot mine, saying it has invested A$7m ($5.1m) in an extended exploration programme at the mine this year.

GOLD Fields played down Australian media reports that it was selling its Darlot mine, saying it had invested A$7m ($5.1m) in an extended exploration programme at the mine this year.

One Australian publication, The West Australian, reported that the company had engaged PCF Capital Group to handle the sale of the mine it had acquired when it bought the Yilgarn assets from Barrick for $270m two years ago.

Gold Fields CEO Nick Holland visited the Australian operations last month and gave a commitment to Darlot that no decision on the sale or retention of the mine would be made until the near-mine exploration programme had been concluded.

“Any decision — if at all — on the future status of the mine will only be taken once the reserve potential of the mine has been fully assessed.

“That is unlikely to happen this year,” said Gold Fields spokesman Sven Lunsche.

Gold Fields, the Australian publication said, wanted $20m$30m for Darlot, which produced 84,000oz of gold last year at an all-in cost of $1,200/oz, making it the most marginal of the company’s mines.

Gold Fields was reviewing its entire asset portfolio in light of the weak gold price, Mr Lunsche said, pointing out that the company had already disposed of a number of assets, including three deep-level gold mines in SA and a range of exploration properties to prepare for a low gold price environment.

Gold Fields spent A$5m on exploration at Darlot last year.

Stuart Mathews, the head of operations in Australia, told the Diggers & Dealers mining conference yesterday the Australian mines contributed about 45% of the company’s gold last year.

Last year, the Australian mines, which include Agnew, Lawlers, St Ives and Granny Smith, produced 1.03-million ounces at an all-in cost of $1,015/oz. They are forecast to produce 983,000oz this year at an all-in cost of $966/oz.

Darlot is by far the smallest mine in the Australian portfolio and it has a life of mine to the middle of next year.

“The focus in 2015 is on determining the mine’s potential to be a long-term franchise asset,” Mr Mathews said. Darlot has gold reserves of 100,000oz and resources of 300,000oz.

Gold Fields has upped the tempo of exploration in Australia, setting aside A$85m this year to grow its resources, which Mr Mathews said was one of Australia’s largest gold exploration budgets for the year.

Gold Fields reports interim results on August 20.