LONDON – South African miner Gold Fields has hired investment bank RBC Capital Markets to explore the sale of a 30% stake in its gold project in northern Chile, two sources said.

The gold sector has seen two multi-billion dollar takeovers over the last 18 months and bankers and investors say a buoyant gold market could drive further activity.

Gold Fields received environmental approval for the construction of Salares Norte, a mine high in the Andes mountains, in December, and said it would decide whether to go ahead in the first half of 2020 as it needs $834-million in funds.

The two banking sources, speaking on condition of anonymity, said second-round offers are due in the next few weeks.

"We have not yet finalised the funding mechanism for the project should we decide to go ahead," Gold Fields spokesman Sven Lunsche said. He declined to comment on the sale process.

RBC Capital Markets also declined to comment.

If given the go-ahead for completion, Salares Norte would start producing around 450 000 oz of gold equivalent a year from late 2022.

Gold prices rose 18% in 2019 and are trading at around $1,555 per ounce, as investors buy the asset as a shelter from political uncertainty and from an expected slowing of global growth.

Canada's Barrick Gold last year completed its purchase of London-listed Randgold Resources and US-based Newmont Mining bought Goldcorp.

The two acquisitions spurred speculation of a broader pick-up in M&A, although the difficulty of raising capital for larger deals makes small, single-asset purchases more likely, analysts say.

Endeavour Mining abandoned its $1.9-billion pursuit of gold miner Centamin earlier this month, citing a lack of information on its target. Centamin said the proposal was too low.

Mid-tier miners including Kinross Gold, Iamgold and Agnico Eagle Mines need to boost production after years of growth-killing cost cuts and are likely to evaluate mines coming up for sale, bankers said.

Gold Fields operates producing gold mines in South Africa, Ghana, Australia and Peru.