Mindoro Resources (MIO-V) and Gold Fields Netherlands Services, a subsidiary of Gold Fields (GFI-N, GFI-J), have signed an agreement giving the South African gold mining giant the option to earn up to a 75% interest in each of Mindoro’s El Paso, Lobo and Talahib porphyry copper-gold projects in the Batangas province of southern Luzon in the Philippines.
Gold Fields — one of the world’s largest un-hedged gold producers with eight operating mines in South Africa, Ghana, and Australia and a ninth that started production last year in Peru — may earn up to a 75% interest in each of Mindoro’s three projects by funding all exploration and feasibility studies.
The Edmonton-based junior’s El Paso project is 11 km southeast of Freeport McMoRan Copper and Gold‘s (FCX-N) Taysan porphyry copper-gold deposit and 7 km northeast of Mindoro’s Pica porphyry copper-gold prospect.
The Lobo project lies in the western half of the Batangas projects. The SW Breccia of the Lobo project has a National Instrument 43-101 compliant indicated resource, to a depth of 130 metres, of 270,000 tonnes grading 6.49 grams gold per tonne for contained gold of 56,380 ounces. Mineralization is believed to be open at depth and to the southwest along strike.
Talahib lies about 8 km west of the Lobo project and 11 km southwest of Freeport’s Taysan porphyry copper-gold deposit.
Under the earn-in agreement with Mindoro, Gold Fields will manage each project. In the first stage of exploration over the next twelve months, the companies have earmarked a budget of about A$2 million (US$1.49 million).
The money will be spent on diamond drill tests of advanced targets at the El Paso and Lobo projects, and fund target definition work on the Talahib project and the remainder of Mindoro’s tenements.
Gold Fields will also embark on detailed mapping within the area encompassing the Pica porphyry copper-gold prospect, the Old Lobo copper mine, the Lobo project’s south-west Breccia epithermal gold resource, and the Calantas and Mulawin targets on the El Paso project.
In the first phase of the agreement, Gold Fields can earn a 51% interest by spending A$4 million in the El Paso project. It can also get a 51% stake in Talahib by spending A$2 million on the project.
To maintain its 51% interest, Gold Fields must maintain a minimum expenditure each year of A$350,000 per project.
In the second phase of the agreement, Gold Fields can earn a further 24% in the relevant project by completing a feasibility study or contributing a milestone expenditure.
The milestone amount for the El Paso and Lobo projects is A$16 million and for Talahib, A$12 million. These milestone payments would be on top of the expenditure in the first phase of the agreement.
Mindoro targets gold, copper-gold and nickel exploration in the Philippines and favours advancing early stage opportunities to production or joint venture.
At presstime in New York, Gold Fields was trading at US$11.21 per share. The Johannesburg-based company has a 52-week trading range of US$4.64-$14.36 per share, with 653.4 million shares outstanding.
In Toronto, Mindoro was trading at 15¢ per share and has a 52-week trading range of 6¢-42.5¢, with 101.36 million shares outstanding.
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