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Gold Fields finally sells Arctic Platinum for $40m - BusinessLIVE

Wednesday, 24 January 2018

Gold Fields has finally sold the Arctic Platinum Project, which has been in its portfolio for 18 years and never advanced beyond exploration, numerous studies and hopes by the board it would be a mine one day.

The Finnish arm of London-based private equity group CD Capital Natural Resources Fund made the purchase, paying over $40m in cash for the project and agreeing to a 2% smelter royalty on all metals produced.

It ends a long chapter in Gold Fields’s history since it and its then partner, Finland’s Outokumpu, a metals and technology firm, said in 2000 they had found a 2.9-million ounce platinum group metals (PGMs) deposit in northern Finland.

Despite extensive drilling to grow the size of the resource and gain critical mass to justify a mine and concentrator, plans for a mine just never took off. For years afterwards, Gold Fields executives spoke of drilling, studies and pending decisions on whether to build a mine that would primarily generate palladium, with platinum, copper and nickel as by products.

By late 2002, the size of the resource was pegged at 14.4-million ounces of PGMs and gold at two deposits singled out for attention, prompting the company to say it wanted to make a decision on a mining project by the end of that year. By the middle of 2004, with the cost of the project estimated at $260m, executives were speaking of the deposit as one of the world’s major PGM finds.

Plans were for a 10-million tonnes a year mine at 2g/tonne of palladium, platinum and gold, with up to 18,000 tonnes of copper and 8,000 tonnes of nickel a year. The hunt was on to find a company that would toll treat concentrate from the mine.

In 2005, Gold Fields said the cost of the project it envisaged had ballooned to $500m.

There were difficulties in attracting any interest in concentrate from the mine and the outlook for palladium prices was uncertain, leading to talk of perhaps suspending the project.

Outokumpu had left the project by this stage and North American Palladium walked away from participating in the venture in 2008, saying there would not be a positive bankable feasibility study for building a mine at the deposit.

Gold Fields CE Nick Holland said in late 2010 that the company would run a six-month pilot test on a relatively new process called Platsol, a pressure oxidisation technology that extracts PGMs and associated base metals from sulphide ore bodies. But the Platsol work was unable to save the project, and Gold Fields has for years tried to sell it.

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