South Africa's Gold Fields Ltd. could invest up to $2 billion to develop a gold and copper prospect in the Philippines, a government official said on Wednesday, although the company said it was far too early for such estimates.

Gold Fields, the world's fourth-largest gold producer, said on Wednesday it had made a $66 million downpayment for an option to acquire a 60 percent interest in the undeveloped Far Southeast gold-copper project.

Their initial disclosure to us, assuming the due diligence is successful, they are looking at $1.8 billion to $2.0 billion investment budget, said Leo Jasareno, director of state agency Mines and Geosciences Bureau.

That cost covered exploration to full development, he said.

A Gold Fields spokesman in Johannesburg said it was far too early to begin allocating a budget or estimating costs for the project, not least because the company has not yet decided if it will exercise the option or not.

Gold Fields entered into option agreements a year ago with the Philippines' Lepanto Consolidated Mining Co. and Liberty Express Assets to buy 60 percent of the project.

The option price was $340 million, which included the downpayment and the $54 million Gold Fields previously paid. Under the deal, Gold Fields has until March 2012 to conduct a drilling programme as part of a feasibility study.

On Wednesday, the South African miner said if it exercised the option it would deliver a final payment of $220 million in the first half of next year. Chief Executive Nick Hollands said in a statement the drilling results showed promise.

The project is in the northern part of the country's main Luzon island, and Gold Fields said it has ready access to established infrastructure, including roads, tailings facilities, power and water.

Jasareno told reporters that if Gold Fields was satisfied with the due diligence results, its plan was to apply for a Financial or Technical Assistance Agreement, the mining permit required for large-scale mining exploration and development projects.

The Philippines' mining sector is getting positive response from foreign investors keen to pursue mining ventures, as few signs of a slowdown are seen in mineral demand from countries like China, but policy bottlenecks are limiting a quicker flow of investments.

The government expects new investments in its minerals industry to hit $2.8 billion this year, double an initial forecast and the highest annual figure since the sector was fully opened to foreign investors in 2005.