Gold Fields plans to break ground on Chile gold mine prospect

Gold Fields, a global diversified gold producer, has announced an investment of nearly $12 billion into a South American project in Chile. The project, which could potentially yield full production of 150,000 ounces of gold per year for the first seven years, has the potential to be transformative for the company. Sven Lunsche, Vice President of Corporate Affairs at Gold Fields, stated that the project was developed from scratch after the discovery of gold in northern Chile in 2011. The company is currently awaiting approval from environmental authorities in Chile, which could take anywhere from 18 to 24 months. Despite the substantial initial investment of $835 million, the project is expected to generate significant profits with gold production estimated at $465 per ounce. This project would contribute approximately 20 to 25% to Gold Fields' total output, which currently stands at just over 2 million ounces per year. Lunsche expressed confidence in the project's potential and the company's ability to fund it through various options, including traditional financing or seeking technical, minority, or local partners. The project, located 5,000 meters high in a desert environment, is being viewed as a promising prospect for further gold explorations within the region. While Gold Fields remains committed to its existing projects in Australia and Ghana, the new Chilean venture represents a significant addition to the company's portfolio. Regarding the South Deep mine in South Africa, Gold Fields has acknowledged past challenges with the mine's performance and ongoing restructuring efforts. The company aims to break even with South Deep this year and start generating positive cash flow from next year onwards. Lunsche addressed concerns about the possibility of Gold Fields relocating its domicile from South Africa due to potential growth opportunities in other markets. He emphasized that the company's listing requirements, corporate governance, and shareholder base outside of South Africa provide stability and make a domicile change unnecessary at this time.