Gold Fields Update on Lepanto Deal

I got the chance to exchange emails with Ms. Nikki Catrakilis-Wagner, Investor Relations from Gold Fields, a gold exploration company that struck a deal with locally listed miner, Lepanto (LC). I requested for an explanation/update on the deal they made last September. Please check her reply to my email below.

Dear Mr. Evangelista,

Thank you for your email. As you correctly mention, in September 2010 Gold Fields entered into option agreements with Lepanto Consolidated Mining Company (Lepanto), a company listed in the Philippines, and Liberty Express Assets (Liberty), a private holding company, to acquire a 60% interest in the undeveloped gold-copper Far Southeast (FSE) deposit in the Philippines.

The agreements provide Gold Fields with an 18-month option on FSE, during which time Gold Fields will conduct a major drilling programme as part of a feasibility study on FSE. Gold Fields is required to pay (i) US$10 million in option fees to Lepanto; and (ii) US$44 million as a non-refundable down-payment to Liberty upon signing of the option agreements.

Should Gold Fields, after a 12-month period, decide to proceed with the acquisition of the 60% interest in FSE, a further non-refundable down-payment of $66 million will be payable to Liberty, with the final payment of US$220 million payable at the expiration of the option period. The total pre-agreed acquisition price for a 60% interest in FSE, inclusive of all of the above payments, is US$340 million.

FSE is located within an existing mining camp and is in close proximity to two other mines historically operated by Lepanto, one of which is currently in production. FSE 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 supportive community established around mining over the past 70 years.

While there has not been sufficient work completed to declare a mineral resource for FSE, drilling undertaken over a number of years indicates the presence of a large, concealed gold-copper mineralised porphyry system. More than 80 diamond drill holes totaling more than 35,000 metres have intersected a mineralised zone with approximate dimensions of 900 metres east-west by 900 metres north-south by 900 metres vertical. Within this zone Gold Fields considers that mineralisation is continuous. While grades are variable, the following historic drill intersections are considered typical of the mineralized zone: 691m at 2.5g/t Au, 0.9% Cu; 906.8m at 1.5g/t Au, 0.5% Cu; 613.1m at 0.8g/t Au, 0.8% Cu; 733.9m at 0.7g/t Au, 0.4% Cu; and 517.4m at 0.6g/t Au, 0.4% Cu.

FSE is located in the northern part of Luzon, the largest island in the Philippines.

We are in the process of sourcing a team that can begin work on this project and we will provide the market with updates of our progress in either the quarterly publication or in press releases, should it be deemed necessary.

Kind regards,

Nikki Catrakilis-Wagner

Investor Relations

Gold Fields Limited

T: +27 11 562 9706

F: +27 86 540 8183

Opinion: We better keep an eye on this story because based from their email, they are "Interested". In a presentation they made for a Morgan Stanley conference, they told investors that they are very much keen on acquiring additional assets to beef up their gold portfolio here in Australasia.