MANILA, Philippines - The Philippine Stock Exchange (PSE) yesterday had to temporarily suspend trading of Lepanto Consolidated shares following a much anticipated investors’ briefing in South Africa by Gold Fields Limited which is eyeing a stake in Lepanto’s Far South East (FSE) gold project.
Lepanto shares has been the stellar performer in an otherwise lackluster market over the past few weeks.
Anticipation had been building that the South African miner would finally indicate its commitment to acquire a stake in the FSE project.
However, Gold Fields did not announce anything new in yesterday’s investors’ briefing. It merely reiterated its 3rd quarter disclosure which states that it sees “significant upside potential” at its current exploratory drilling at the FSE project in the Philippines and will be ready to deliver its first resource report in the second half of 2012.
Gold Fields is supposed to make a final decision in March 2012 if it will proceed with its plan to acquire 60 percent of the Far Southeast project from Lepanto Consolidate Mining Co.
Upon resumption of trading of Lepanto shares yesterday at the PSE, from a high of P1.79, the price of Lepanto A shares quickly dropped to P1.64 before ending at P1.65 per share.
In its 3rd quarter report, Gold Fields reported that work at the FSE shows that “the initial proof-of concept drill results have confirmed our initial understanding of the scale and grade of the deposit and demonstrated significant upside potential at depth and in all lateral directions.
It further disclosed that “on the back of positive drilling results we have made the second down payment of $66 million in terms of the option agreements to acquire a 60-percent interest in the project. We have eight drill rigs on site and plan to deliver a first resource during the second half of 2012.”
In September this year, Gold Fields had hinted that it is coming closer to making an investment in the Philippines following favorable results of its ongoing exploration activities involving the Far Southeast ore body of Lepanto Consolidated Mining Co.
In a press statement, Nick Holland, chief executive officer of Gold Fields, said: “We are pleased with the results to date and excited at the prospect of establishing a long-standing mutually beneficial relationship in a promising region in the Philippines.”
Gold Fields is conducting an extensive drilling program for the Far Southeast ore body in the municipality of Mankayan, Benguet. It currently has eight underground drill rigs turning.
Initial results, according to Gold Fields, “support the existence and extent of the known core of mineralization as well as further extensions both laterally and at depth beyond this core.”
Gold Fields said “the company is continuing with its underground drilling program and has also commenced with surface geotechnical drilling during this quarter.”
The FSE project is situated in an existing mining camp in close proximity to two other mines historically operated by Lepanto, one of which is currently in production.
The FSE project has ready access to established infrastructure, including roads, tailings facilities, power and water.
The existing workforce on the doorstep of FSE is part of a community established around mining over the past 70 years, Gold Fields pointed out.