Gold Fields’ Chilean mining project gets green light

Gold Fields has announced the successful raise of funds to support its new Salares Norte mining project in Chile. The company managed to secure about 30% of the total project requirement of $860 million from shareholders in a recent share placing, giving them the green light to move forward with the project. CEO Nick Holland shared that the next steps include expanding the camp at the remote Atacama desert site, located 4,700 meters above sea level. The team will focus on getting the necessary infrastructure on site by the spring of October this year, with construction of the process plant and stripping of the pit to access high-grade ore set to begin soon afterward. The project is expected to take around 33 months, with the first production planned for the first quarter of 2023. Holland also discussed the company's decision to fund a significant portion of the project internally, leveraging their solid financial position, improved prospects for the gold price, and expected strong operating cash flow from their existing operations. While the share placing was a key part of the funding strategy, it also aimed to insulate Gold Fields from potential volatility in the gold price, allowing them to maintain their dividend policy and sustain existing operations. When asked about the current environment for gold prices, Holland highlighted the support provided by historically low interest rates amidst high global debt levels. While refraining from making specific price predictions, he emphasized the potential for continued strength in the gold price given these structural factors. In light of the increased activity in acquiring new assets and mines within the commodity sector, Holland indicated that Gold Fields' focus would remain on the newly approved Chilean project and organic growth opportunities at their existing mines. He reiterated the company's strategy of maximizing potential in current operations before exploring external acquisitions. Regarding the recent sale of Anglo-Gold assets and Harmony emerging as the successful bidder, Holland confirmed that Gold Fields was not involved in the process, expressing a preference for directing investments outside of South Africa. He emphasized the importance of stable regulatory frameworks and reliable energy infrastructure to facilitate renewable energy investments and project development in the country, urging policymakers to streamline processes and reduce red tape for companies like Gold Fields. In conclusion, Gold Fields is poised to advance its Salares Norte mining project in Chile following successful fundraising efforts. The company's strategic focus on leveraging internal resources, capitalizing on favorable market conditions, and prioritizing sustainable operations underpins its growth trajectory in the competitive global mining industry.