Gold Fields Ltd ADR Earnings Call Insights: Chucapaca Options and Heap Leach Tuck-In Rates

Gold Fields Ltd ADR (NYSE:GFI) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Chucapaca Options

Patrick Chidley – HSBC: First question goes on Chucapaca. Just a little follow-up there on what the options might be. Can you remind us what the grade of the previous plan was going to be in terms of the larger open pit and then can you maybe outline how big the higher grade area might be – could be underground mineable and just bit more detail about what might happen there?

Nicholas J Holland – CEO: The grade on the gold equivalent basis because there is little bit of copper and silver in the deposit. There is about 1.8 grams – ton gold, bearing in mind that we had round about 7.6 million ounces there. So, what we are looking at, within that envelope there are some high grade sections within that ore body and we are looking at seeing whether we could develop a much higher grade than that underground operation. But we are still modeling that work at the moment so we don’t have the final results of that, but I guess we should be finished with that analysis in about three month period from here and then we will assess whether in fact that still works taking into account we still have enabling capital on the site and there is other capital and whether, in fact, this operation can support what would be a significantly lower volume operation that what we were contemplating in the feasibility study. The feasibility study, Patrick, was contemplated about 30,000 ton a day plant. So, this would be a lot lower than that, but obviously much higher grade and whether or not this is going to translate into a viable project, but all the technicals, it’s too early, I’m afraid to give you a view on that. But you’d be looking at much, much high grade than what I have given you there for the original study.

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Patrick Chidley – HSBC: So, that’s possible to actually drill down to just a smaller resource as much higher grade. I don’t know underground mineable grades, let’s say?

Nicholas J Holland – CEO: Yeah. Technically, it could be possible. Now whether or not this is going to be economic, we still have to see. But technically, we are stress testing it. We may have to do some more drilling to firm that up because I think we need a resolution of drilling, particularly on the high grade areas and we are doing all that work and that might be the start of a modular process where we start that and then we graduate to something bigger over time. The other thing is there are other ore bodies in the area of interest that we might look at and there is another interesting exploration play within 2 kilometers of what is actually (indiscernible). We refer to (indiscernible) as Chucapaca, but Chucapaca has actually got about four to five targets and there is another target that we’re looking at drilling, which may also provide some additional flexibility. So, there is number of options here, but I can’t give you any guarantee that we will be successful at this stage on any of them…

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