JOHANNESBURG (miningweekly.com) – Gold major Gold Fields will sell its 51% stake in the Chucapaca gold mine, in Peru, to its joint venture partner in the project Compañía de Minas Buenaventura for $81-million.

In addition to the $81-million, Gold Fields would also receive a 1.5% net smelter royalty on future sales of gold, copper and silver produced at the current Chucapaca concession.

"We are pleased to have agreed terms with Buenaventura to sell our controlling stake in Chucapaca. The royalty agreement provides us with future upside, as we see Buenaventura, with its local expertise and experience, advancing this project fairly quickly,” Gold Fields CEO Nick Holland commented.

"Chucapaca, as an underground mining project located in Peru, offers an important potential to continue growing in terms of gold resources and future production. This acquisition fits perfectly with Buenaventura's expertise to develop underground mining operations that will permit the maximisation of shareholders value, adding precious metal resources to our portfolio,” Buenaventura chairperson and CEO Roque Benavides stated.

Meanwhile, Gold Fields said the sales price and the royalty deal would ensure that the company’s investments in the project were recouped.

At end-December 2013, Chucapaca had gold mineral resources of 6.1-million ounces and, therefore, the sale price equated to $26.20/oz of attributable gold resource, which was in line with weighted average enterprise values of openpit projects globally, the company noted.

"The sale of our stake is in line with our strategy of focusing on growing cash flow and moving away from greenfield exploration and new project development as a strategy for growth, in favour of the acquisition of in-production ounces and near-mine exploration and development,” Holland added.

Earlier this year, Gold Fields sold its 85% interest in the Yanfolila project, in Mali, to London-listed Hummingbird Resources. It also sold its interest in the Talas project, in Kyrgyzstan.