Gold Fields to make decision on Chile gold mine next year

Salares Norte - high-grade gold-silver oxide deposit discovered by Gold Fields in March 2011

By Peter Hobson

SANTIAGO, April 11 (Reuters) - South African miner Gold Fields Ltd will complete preparatory work in 2019 at its Salares Norte project in northern Chile and is eyeing potential output of around 345,000 ounces of gold a year at the site by the early 2020s, a company executive said.

Gold Fields will decide whether to give the go-ahead for construction of the mine high in the Andes mountains next year, Alberto Cardenas, vice president for operations in the Americas told Reuters.

"Probably we are going to be in study mode until September next year," he said in an interview at the CRU/CESCO copper conference in Chile on Tuesday.

"After that, if we continue with the project we start burning the $850 million construction budget ... It (the decision on investment) is going to be 2019."

Gold Fields produced 2.16 million ounces of gold last year but profit fell 4 percent as it struggled to resolve operational issues at its underground mine in South Africa, South Deep.

The company is also investing in a new mine in Australia and upgrades at mines in Ghana and Peru.

Assuming the Salares Norte project gets the go-ahead, Cardenas said he expected production to begin around 2021 and quickly achieve target output of 345,000 ounces of gold a year.

"We expect to be at that level of production during the first year or entering the next year. It could be higher," he said.

The financing of the project had not been finalized, he added.

"It's still open how to structure that. There is no clear resolution - it could be a JV (joint venture) or any alternative." (Reporting by Peter Hobson, Editing by Rosalba O'Brien)