Arctic resources snowball (August 01, 2002)

Drilling by South Africa’s Gold Fields (GFI-N) and Finnish-based Outokumpu has boosted the resources estimate at the partners Arctic Platinum Partnership project in northern Finland.

Based on an additional 14,300 metres of infill drilling on the Konttijarvi and Ahmavaara deposits, plus 5,300 metres of definition drilling on extensions of the deposits at Konttijarvi North and Ahmavaara East, resources at the two deposits have climbed from 6 million oz. combined platinum, palladium and gold (PGM+Au) to 9.1 million oz., based on a cutoff of 0.5 gram PGM+Au.

Resources in all categories at Ahmavaara now stand at 99.8 million tonnes running 1.1 grams palladium, 0.23 gram platinum, 0.14 gram gold, 0.22% copper and 0.09% nickel. Of that, 27.2 million tonnes of 1.33 grams palladium, 0.27 gram platinum, 0.16 gram gold, 0.27% copper and 0.12% nickel are classified as measured.

At Ahmavaara East, total resources, based on 11 holes averaging 141 metres in length, are pegged at 29.8 million tonnes grading 0.83 gram palladium, 0.18 gram platinum, 0.11 gram gold, 0.17% copper, and 0.06% nickel. Indicated resources include 1.2 million tonnes running 0.71 gram palladium, 0.13 gram platinum, 0.10 gram gold, 0.15% copper, and 0.05% nickel.

With the discovery and evaluation of Konttijarvi North, an up-thrown extension to the Konttijarvi orebody, combined resources at Konttijarvi have increased to 54 million tonnes averaging 1.44 grams palladium, 0.40 gram platinum, 0.10 gram gold, 0.16% copper, and 0.06% nickel. Measured resources ring in at 19.1 million tonnes of 1.56 grams palladium, 0.43 gram platinum, 0.10 gram gold, 0.15% copper, and 0.08% nickel.

The partners are in the midst of a feasibility study of the Suhanko project. The study is looking at a proposed open-pit operation with on-site processing to concentrate. The plans also considers the incorporation of open pit and underground mining of the SK Reef, about 20 km to the northeast.

The study is slated to wrap up in September.

When resources at the SK Reef (35 million tonnes running 3.55 grams palladium, 0.97 gram platinum, 0.15 gram gold, 0.12% copper and 0.10% nickel) are included, Suhanko’s total resources grow to 1.54 grams palladium, 0.38 gram platinum, 0.13 gram gold, 0.18% copper and 0.08% nickel for 14 million oz. of contained PGM+Au.

Since the beginning of 2002, Gold Fields and Outokumpu have been jointly funding the project at their respective 51-49% interests.

On the financial front, Gold Fields has posted record earnings of US$112 million (or 24 per share) on revenue of US$372 million for the fourth quarter of its fiscal year. A year earlier the company suffered a net loss of US$194.7 million (43 per share) on US$235.6 million.

The quarter’s attributable gold production increased 36% from the previous year to about 1.16 million oz., of which 29% was derived from international operations, up from 27% during the previous quarter. The increase is thanks to the acquisition of Damang mine in Ghana and the St Ives and Agnew mines in Australia. Total cash costs climbed US$11 per oz. from the first quarter to US$171 per oz. on a strengthening rand.

Overall in the company’s 2002 fiscal year, net earnings were US$302 million (65 per share) on revenue of US$1.2 billion, compared to a yea-ago loss of US$119.2 million (26 per share) on US$1 billion.

During 2002 attributable gold production rang in at 4.1 million oz., up from 3.7 million oz the previous year. Total cash costs fell to US$171 per oz. from US$196 per oz. in 2001.

The company averaged US$311 per oz. for its quarterly production and US$292 per oz. for the year.

At the end of June, the company had US$196 million in cash, US$182 million in debt

Gold Fields’ board has declared a final dividend of R2.20 per share, payable to shareholders of record on Aug. 23, 2002.