Exploration and corporate development

Activities by the Gold Fields Exploration Group remained at a high level during the quarter with drilling programmes on nine greenfields projects in six countries (Australia, Philippines, Peru, Chile, Canada and Kyrgyzstan) as well as at the near mine exploration at St Ives, Agnew and Damang. 

In addition to the ongoing exploration projects, the Group maintains an aggressive business development function to seek out and evaluate the most attractive exploration opportunities available for joint ventures or acquisitions largely within the countries and belts in which Gold Fields is currently active.

Advanced drilling projects

At the Chucapaca Project in southern Peru, where Gold Fields expects to earn a 51 per cent interest in a joint venture with Buenaventura during the March quarter (NYSE “BVN”), initial resource delineation drilling continued on the Canahuire target and is scheduled for completion during the March quarter.  Initial drilling commenced on the Katrina satellite targets during the quarter.  In addition to resource estimation and pit optimisation, other elements of the scoping study (including metallurgical test work, site studies, operating and capital cost estimations) are in progress and on track for completion by the end of March 2010.

At the Talas Project in northern Kyrgyzstan, where Gold Fields can earn up to a 70 per cent interest in a joint venture with Orsu Metals Corporation (TSX: “OSU” and AIM: “OSU”), resource delineation drilling was concluded in November 2009 at the Taldybulak Au-Cu porphyry target.  Other key components of the internal scoping study are in progress including metallurgical test work, site layout studies, costing, block modelling and pit optimisations.  Internal scoping is expected to be completed during the March quarter.

At the Arctic Platinum Project in Finland, a 10-hole, 1,000 metre drilling programme commenced in January 2010 to provide sample material for metallurgical test work which will investigate the complete process from ore preparation through flotation to hydrometallurgical treatment of the flotation concentrate.  Other activities to be completed during the year include external engineering reviews of the 2005 and 2008 feasibility studies, and, the 2009 hydrometallurgical process (Platsol) desktop study in order to update the capital and operating costs for the total project as well as external audits and updates of the Konttijärvi, Ahmavaara, Vaaralampi and SK Reef resource models.

Initial drilling projects

At the East Lachlan joint ventures in New South Wales, Australia, where Gold Fields is earning into an 80 per cent interest in four porphyry Au-Cu project areas from Clancy Exploration Ltd (ASX: ”CLY”), diamond drilling at the Myall Project has intersected significant sections of potassic alteration with associated sulphide (chalcopyrite-pyrite ± bornite) and quartz veining.  At Cowal East a diamond drilling programme is currently testing three targets.  Significant potassic magnetite-biotite-pyrite±chalcopyrite alteration of diorite and volcanics was intersected at the Eurowie target which is characteristic of the alteration present in the upper disseminated zone of the Cadia East porphyry Cu-Au deposit.  Results are awaited.  A detailed aeromagnetic survey has been completed at the Wellington North Project and processing will be completed in the March quarter.  Significant copper and zinc anomalism has been identified in aircore drilling at the Currumburrama Option project which is coincident with the main geophysical target zone, and consistent with a Lake Cowal style mineralised system.

At the Batangas joint venture in the Philippines, where Gold Fields can earn up to a 75 per cent interest in a joint venture with Mindoro Resources Ltd. (TSX.V: “MIO”), initial diamond drilling is in progress on the El Paso porphyry Cu-Au target.  A project-wide, detailed aeromagnetic survey was completed in December 2009 which is expected to provide a framework for further targeting and focussing exploration over an area of about 28,000 hectares.  

At the SBX joint venture in Chile, where Gold Fields can earn up to 90 per cent on three claims held by SBX Asesorias e Inversiones and 100 per cent on a fourth property under a separate option agreement with S.C.M. Aguas Heladas, field activities resumed in October 2009 after the winter hiatus.  A CSAMT geophysical survey and follow-up diamond drilling were completed at the Pircas project where scout RC drilling in financial 2009 had intersected significant Au mineralisation associated with oxidised structurally-controlled vuggy silica breccias.  Drilling will continue in the March quarter to test a large resistivity anomaly detected by the CSAMT survey.

At the Woodjam Project in B.C., Canada, Gold Fields can earn up to a 75 per cent interest in the Woodjam North joint venture with the Woodjam Partners (Fjordland Exploration Inc. (TSX.V: “FEX”) and Cariboo Rose Resources (TSX.V: “CRB”)).  Field work included geological mapping, soil geochemical sampling, IP-resistivity and gravity geophysical surveys, an aeromagnetics survey and 4,583 metres of initial diamond drilling in 14 holes on the Takom and Deerhorn porphyry Au-Cu targets. 

At the Toodoggone joint venture in B.C., Canada, where Gold Fields can earn up to a 75 per cent interest in a joint venture with Cascadero Copper Corp. (TSX.V: “CCD”), the initial diamond drilling programme concluded for the season in October 2009.  In December 2009, Gold Fields received written notification from the First Nations tribal groups in the Toodoggone project area stating their opposition to mining and mineral exploration.  This declaration contradicts their previous position which had supported the exploration activity.  Clarification will be sought in further discussions with the First Nations groups before planning further work on the project.

Near mine exploration

At St. Ives in Western Australia, the outcome of exploration efforts over the past twelve to eighteen months is that the Argo – Athena camp is now recognised as a significant new field and requires an accelerated exploration strategy to support sustainable growth.  The exploration team has been tasked to prepare a sustained 3-year exploration programme and budget to advance open pit and underground projects in this camp.  Success with new open-pittable resources has also been achieved at Hamlet, Apollo and Dianna, with emerging potential at Yorrick and Poseidon.  Additional funding has been granted to accelerate the Hamlet, Poseidon and Yorrick projects.

At Athena the mining of the decline is on schedule.  At Yorick South, drilling focused on shallow high grade areas and results from recent reverse circulation (RC) drilling are showing similarities to mineralisation at Hamlet.  At Poseidon, diamond and RC drilling are indicating a larger mineralised system than the original models with emerging potential for new open-pittable resources.

Resource definition and extensional drilling programmes continue with encouraging results at the Cave Rocks, Northern Naiad and Argo underground mines.  Good progress is being made with the ongoing review and consolidation of modelling and resource estimation at the Revenge, Neptune, and Leviathan surface mines.  At Apollo, within the Argo – Athena camp, mining was able to start a month earlier than planned and extensional drilling was completed. 

At Agnew, indicative results from the surface directional drilling programme suggest that the Kim Lode below current infra-structure maintains a 4 metre true width averaging +5 grams per ton Au over a strike length of 250-275 metres.  The adjacent Edmunds Lode averages a 3 metre true width at +5 grams per ton Au and has a strike length of 80-120 metres.  At least one area of bulk mining potential has been identified. 

At Damang, the phase 1 drilling programme at Huni Gap within the Greater Damang project has been completed.  Assay results have confirmed continuity of mineralisation in this gap between the Huni and DCPB pit shells.  To the immediate south of the DPCB, at Juno, drilling has commenced on a combined RC and diamond drilling infill programme within the limits of the previous pit shell.  The initial RC drilling is showing prominent veining with sulphide mineralisation in all lithologies below the pit floor.  Further to the south, drill pad preparation and resource modelling are in progress at the Nyame and Tamang projects, all of which make up the Greater Damang project.  At Abosso Deeps, which is a conglomerate reef underground mining project, the deeper Phase 1B drilling was delayed until mid-January due to the lack of drill rig availability.

At Cerro Corona, in Peru there has been no activity during the quarter.  In the aftermath of the community unrest experienced in September 2009 against exploration in the Hualgayoc District, the Gold Fields – Buenaventura joint venture decided to declare an indefinite suspension of field activities.  The situation is continually monitored and field activities will resume when appropriate.

Corporate development

Business development activities this quarter included the successful conclusion of two new greenfields exploration deals in South America.  One is a joint venture to earn-in up to 70 per cent of selected properties owned by Vena Resources Inc. (TSX.V: “VEM”) in the Esquilache District which is located within the region around the Chucapaca Project in Southern Peru.  The other is an option to acquire 100 per cent of the Pedernales Project from a private owner.  The Pedernales property is located in the vicinity of the SBX joint venture and Pircas projects in northern Chile.  Evaluations and negotiations are in progress for other attractive acquisitions and joint ventures close to our existing projects and operations in the Philippines, Australia, Ghana, Mali, Peru and Kyrgyzstan.