Gold Fields plans to purchase new low-cost gold mines

18 September 2014 (Last Updated September 18th, 2014 18:30)

South Africa-based Gold Fields is planning to buy new gold mines that are already in production, with the aim of increasing its cashflow.

South Africa-based Gold Fields is planning to buy new gold mines that are already in production, with the aim of increasing its cashflow.

According to Gold Fields CEO Nick Holland, the move is part of its core competence to buy high-quality mines at low costs, reported Bloomberg.

Last year, the company purchased three mines, known as Yilgarn, from Barrick Gold for $270m. The intention was to cover the purchase cost within two years through increasing production at the three mines.

"If we could repeat the success of the Yilgarn acquisition in Australia, then clearly we would be looking to try and buy something."

Holland told the news agency that: "If we could repeat the success of the Yilgarn acquisition in Australia, then clearly we would be looking to try and buy something.

"These would be typically bolt-on deals of in-production assets generating free cash."

The company is mainly targeting cheap assets, which are sold by large producers intending to reduce their debts.

In February last year, the company also sold three of its old but cash-generative mines in South Africa under a plan to stop sourcing gold in virgin territory and spend more on areas where mining is already underway.

According to Holland, the company will focus on drilling near St Ives and Darlot in Australia and Tarkwa in Ghana.

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