Gold Fields: Peru commitment no self-runner
April 20.04.2012, XNUMX Johannesburg - In Peru, things are not going very well for the South African gold producer Gold Fields. Because the company is facing some difficulties. However, there is also positive news from the South American country.
The South Africans are assuming a lower gold production in their Peruvian Cerro-Corona deposit of between 320.000 and 340.000 troy ounces - in 2011 the company still produced 385.000 troy ounces of gold. However, the gold reserves in the Chucapaca project, which is to go into production from 2015, increased to currently 7,6 million troy ounces of gold equivalent. In the run-up, the group assumed a mere 5,6 million troy ounces.
Investment needs significantly higher than expected
But there is a downside: In the mentioned project, which is being developed together with the Peruvian company Buenaventura, the South Africans have to expect much higher initial investment costs: According to the company, the related costs will increase from 750 million to 1,2 billion dollars. And on-going investments are also expected to grow to an additional 300 to 400 million dollars.
The increase in reserves in the Chucapaca project is basically positive. The lower gold production rate in the Cerro Corona Mine and the increased investment costs in the Cerro Corona Mine could, however, have a negative impact on South Africans. Nevertheless, the involvement of Gold Fields in the Andean state is likely to pay off in the longer term, as the country - as seen - has considerable gold reserves and labor costs are very manageable.
(Www.emfis.com)
