Gold Fields is set to boost its exploration activities in Finland through a gold exploration venture with European Diamonds. The world's fourth-largest gold company will pay for a 5% stake in the company, which is listed on London's Alternative Investment Market.
The Finnish firm is exploring for diamonds near the village of Lentiira, which is about 500km north east of Helsinki.
Gold Fields' existing Finnish project is Arctic Platinum which is conducting a feasibility study on platinum group metal reserves. Arctic consists of two projects, Suhanko, which is in the feasibility study stage, and SK Resources, in the pre-feasibility stage.
Gold Fields could lift its stake in the diamond company over the next three years, with the option to add 5% a year to its initial stake. This gives the company the opportunity to increase its holding to 20%.
Under the terms of the agreement the additional stakes would have to be bought at a 15% premium to the company's share price at the time of purchase.
Gold Fields, which will have a 75% stake in the gold exploration project, will also contribute $4,25m to the exploration costs.
European Diamonds will remain in full control of its diamond business, and will have a 25% stake in the gold project without having to invest until the completion of a bankable feasibility study on any gold deposits.
The company had noticed indications of gold mineralisation during its diamond exploration operations.