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Gold Fields and Buenaventura announce major gold discovery in southern Peru

Tuesday, 11 May 2010

Chucapaca’s joint venture partners, Gold Fields Limited (51%) (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) and Compañía de Minas Buenaventura S.A.A. (49%) (Buenaventura, BVN), are pleased to announce the discovery of a major gold-copper-silver deposit in their Chucapaca project area (CPA) in southern Peru.

Called the Canahuire deposit, it has a Mineral Resource estimate of 5.6 million gold equivalent ounces1 (Table 1), with mineralisation potential beyond the extent of current drilling.  The Inferred Mineral Resource for Canahuire is approximately 83.7 Mt at 1.9 g/t gold, 0.09% copper and 8.2 g/t silver for a total of 5.6 million gold equivalent (AuEq1) ounces.

Table 1: Chucapaca Project, Canahuire Deposit Inferred Mineral Resource (1 May 2010)*

Tonnes
(Mt)

Grade Au
(g/t)

Grade Ag
(g/t)

Grade
Cu (%)

Grade AuEq1
(g/t)

Metal AuEq1
(Moz)

83.7

1.9

8.2

0.09

2.1

5.6

* These Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.  Attributable metal to Gold Fields and Buenaventura is 2.9 Moz AuEq1 and 2.8 Moz AuEq1, respectively.  The Mineral Resource is reported at a 0.67 g/t gold equivalent cut-off grade constrained within an optimised pit shell.  The pit shell is based on price assumptions of US$1,150/oz gold, US$3.00/lb copper and US$17/oz silver.  The Mineral Resource estimate, which is reported in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves, 2007 Edition (SAMREC code), is reported without dilution or ore loss.

In a joint statement Nick Holland, Chief Executive Officer of Gold Fields, and Roque Benavides, Chief Executive Officer of Buenaventura, said: “Canahuire is a highly promising gold discovery in an emerging gold district in South America.  Geological indications are that there is significant upside at the Canahuire deposit, as well as at other targets within the project area.  This is an important growth opportunity for Gold Fields and Buenaventura, and, could also make a significant contribution to the economic development of our community partners in the Moquegua region.”

The Canahuire deposit is one of several targets in the 12,700 ha CPA, which is on average 4,800 m high and located in the Altiplano area of southern Peru, 120 km northeast of the city of Moquegua.  Both joint venture partners have independently consolidated a significant portfolio of concessions adjacent to the CPA and are advancing exploration on these concessions.

Tommy McKeith, Executive Vice president for Exploration and Business Development of Gold Fields commented: “Delineating a 5.6 Moz AuEq1 resource in only 18 months from the first hole is a remarkable achievement by the exploration team.  The Canahuire interim scoping study is on track for completion by June 2010 and, subject to a positive economic outcome, we will commence pre-feasibility in July 2010.”

“While our initial focus is on the Canahuire deposit, we will at the same time continue to explore the potential of the rest of the CPA,” said Cesar Vidal, Buenaventura’s Executive Vice President for Exploration.

The geometry of mineralisation in Canahuire indicates it is amenable to open-pit mining.  The proposed process consists of crushing and grinding with flotation to produce a smelter-grade copper-gold concentrate followed by carbon in leach (CIL) extraction from flotation tails.  Recovery assumptions are for 77% gold, 82% copper and 44% silver recoveries respectively.

The joint venture partners’ confidence in the success of Chucapaca is based on the following factors:

  • Drillhole sample and grade analysis data used in the Mineral Resource estimate have been verified through quality assurance and quality control programmes.
  • The resource estimation has been independently audited by AMEC, which has also been engaged to complete the Interim Scoping Study.
  • The Mineral Resource is relatively insensitive to variations in metal prices and operating costs.  A 25% decrease in metal pricing results in a 13.0% decrease in Mineral Resource tonnes, a 9.3% improvement in average AuEq1 grade and a 4.9% decline in AuEq1 ounces above cut-off grade.

 

The joint venture company, Canteras del Hallazgo S.A.C (CDH), recently filed a modification to the Environmental Impact Assessment with the Peru Ministry of Energy and Mines to permit expanded activities for further scoping and in-fill drilling and, which details the company’s commitment to environmental best practice.  Drilling activities will recommence after permitting approval is obtained, which is expected by July 2010, and will focus on defining extensions of mineralisation towards the west.  In the interim drilling is underway to test other exploration targets within the CPA.

Since exploration started at Chucapaca, CDH has worked closely with key stakeholders, particularly local communities, by providing open and transparent information.  Agreements have been reached with the Corire, Santiago de Oyo Oyo and Chucapaca communities, which facilitate the continuation of exploration activities and studies.  These agreements provide for health and education programmes in collaboration with the appropriate authorities, sustainable development programmes identified by the communities, participatory work and a variety of training initiatives.

1 Gold equivalent grade was calculated based on gold, silver and copper grades normalised to the differentials of metal prices and recoveries for silver and copper (detailed in this release). Assuming the metal prices net of offsite costs and recoveries as listed in this release.

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