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Gruyere Project - Australia

Gruyere project – 50% attributable to GFI

Gold Fields’ 50% ownership is held by Gruyere Mining Co Pty Ltd and will be reported as managed, unless otherwise stated.

A long-life (13 years), low-cost gold project under construction in the eastern Yilgarn, Western Australia.

Mineral Reserve

1.87Moz gold*

Mineral Resource

3.13Moz gold*

* The 50% share, attributable to GFI

  • The Gruyere project in Western Australia is a 50:50 joint venture between Gold Road Resources and Gruyere Mining Company Pty Ltd, a wholly owned Australian subsidiary of Gold Fields
  • The Gruyere Gold Project is making significant headway, with construction on budget and schedule, the mining contract has been awarded and the process plant construction is progressing well
  • Technical work and project preparation to optimise and deliver on the October 2016 feasibility study for Gruyere continues. This will be a low-cost operation, with average annualised production scheduled at 270koz
  • Updated resource modelling in 2017 demonstrates robust geology and Reserves from the primary production pit
  • First ore production from Gruyere is expected at the end of 2018. Project schedule remains on track to pour first gold at the end of the first quarter in 2019
  • Drilling of six new boreholes below the Resource pit shell in 2017 returned nominally lower grades. At current gold prices and technical inputs, this resulted in a small decrease of Inferred Resources

Asset fundamentals

  Asset fundamentals  
  General location     The Gruyere deposit, centred at latitude 27° 59’ S, longitude 123° 50’ E, within the Yamarna Terrane of the eastern Yilgarn, Western Australia. Gruyere is located 200km east of Laverton and 1,000km north-east of Perth.  
  Licence status and holdings     The project, with granted tenements for mining, exploration and miscellaneous of 201,068ha, is located on mining lease M38/1267 granted on 5 May 2016 for a period of 21 years. The mining lease is wholly within the Yamarna Pastoral Lease  
  Deposit type     Gruyere is an Archaean orogenic gold deposit. Mineralisation is hosted within the Gruyere Monzonite Porphyry. Gold is associated with varying intensity albite-sericite-chloritebiotite-calcite alteration of the host rock.  
  LoM     Currently the total project indicates a 3.74Moz Mineral Reserve (1.87Moz attributable to GFI), supporting average annual gold production of 270,000 (50% attributable to GFI) ounces over a LoM of 13 years  

Brief history

Gold Road discovered the mineralisation at Gruyere in H2 2013 with interface rotary air blast drilling. A total of 87,066m have been drilled from 470 drill holes on the project (357 reverse circulation (RC) holes for 41,264m, 73 holes with RC pre-collars for 14,694m RC and 16,506m diamond core tail, plus 40 full diamond drill holes (DDH) for 14,603m) were drilled as part of the feasibility study.

A further six diamond drill holes were completed in 2017 to test the down-dip extension below the Gruyere Resource pit and potentially convert unclassified material to Inferred inventory.

The Gruyere project is 50% owned by Gold Fields Limited after forming a joint venture (JV) with Gold Road Resources in November 2016. The JV, comprising more than 200ha of miscellaneous, exploration and mining tenements on both the Dorothy Hills Shear Zone (DHSZ) and Yamarna Shear Zone (YSZ), includes in addition to Gruyere, declared Mineral Resources and Mineral Reserves for Attila and Alaric. In addition there are three exploration prospects Montagne and Argos on the YSZ and YAM14 on the DHSZ.

2016/2017 exploration expenditures are presented in the Australia regional section.

Geology

The Gruyere deposit is located on a flexure point of the regional-scale Dorothy Hills Shear Zone within the Dorothy Hills Greenstone Belt, where the shear zone changes from a northerly direction to a north-northwest direction. Orogenic gold mineralisation is hosted within the steep easterly dipping Gruyere Porphyry, a medium-grained quartz monzonite porphyry that has intruded the country rocks, elongated in the direction of the shear zone. The host Gruyere Porphyry averages 90m in horizontal width through the deposit with a maximum width of 190m in the centre of the deposit and tapering to around 5m to 10m width at the northern and southern extremities. The entire Gruyere Porphyry is variably altered and gold grade is related to variations in style and intensity of alteration, structure, veining and sulphide species. Zones containing higher-grade gold mineralisation above 1.2 (g/t) gold generally have strong albite ± sericite ± chlorite ± biotite alteration and are associated with a sulphide assemblage of pyrrhotite + pyrite ± arsenopyrite, weak to moderate foliation, common micro-fracturing and steeply dipping quartz veining. Gold mineralisation at Attila and Alaric comprises steeply dipping shear hosted gold in volcaniclastic sequences, with gold associated with zones of albite ± sericite ± chlorite ± pyrite mineralisation.

Project progress update

A feasibility study was completed on the project in October 2016, which showed a 3.52Moz Mineral Reserve (1.76Moz attributable to GFI), supporting an average annual gold production of 270koz (50% attributable to GFI) over a LoM of approximately 13 years.

With early works at Gruyere having started in December 2016, construction has now been in progress for more than 12 months. Importantly, the project remains on schedule to pour maiden gold at the end of the first quarter of 2019. Costs incurred to date are also in line with the budgeted overall project capital of $532 million.

Aside from engineering and construction being 72% and 32% complete respectively at end 2017, another major milestone during Q4 2017 was the signing of a five-year, A$400 million contract to provide mining services at Gruyere.

The mining contractor will commence construction of the mining infrastructure (workshops and office buildings) in the March 2018 quarter and will have a peak workforce of 170 personnel engaged on the Project.

Mining activities are scheduled to commence in the December 2018 quarter utilising a fleet of 225-tonne payload dump trucks, 400-tonne excavators, production blast hole drills and support equipment to move approximately 31 million tonnes of material a year.

Project construction progress in 2017

Gas pipeline

Final approval from the WA Department of Mines, Industry Regulation and Safety for the construction of the 198 kilometre Yamarna Gas Pipeline (YGP) was approved in Q4 2017.

The pipeline constructor will mobilise its workforce to site to begin works in February. Construction of the pipeline is expected to be completed in the June 2018 quarter.

Civil and structural works and installation of the generators and gas engines have also begun at the 45MW Gruyere Power Station, which will ultimately be connected to the YGP.

Bulk Earthworks

Civil works have continued to make good progress with the Bulk Earthworks, completing several key components of the contract, including the 28km Gruyere main access road, sealed airstrip and clearing for the Stage 1 Pit and tailings storage facility (TSF), during Q4 2017.

The Gruyere main access road, which connects the site with the Mt Shenton‐Yamarna Road, and the Gruyere airstrip are both now open. Civil Aviation Safety Authority (CASA) certification to accept larger aircraft is anticipated to be granted in the March 2018 quarter.

Work has begun on the upgrade of the Mt Shenton‐Yamarna Road, which is scheduled for completion in the March 2018 quarter, as well as the construction of the TSF embankment walls using material extracted from the Stage 1 Pit, which will be the final activity undertaken as part of the Bulk Earthworks contract and is scheduled for completion in the June 2018 quarter.

EPC

The engineering, procurement and construction (EPC) contractor, had poured 4,200m3 of concrete in the process plant area, including the largest single pour to date of 750m3 for the primary crusher raft slab. A further 10,500m3 of concrete is to be poured before the process plant is complete.

Construction of the seven carbon‐in‐leach tanks is progressing to schedule. The floor and annular plates for the tanks were transported to site from the fabrication facility while welding has commenced on these tanks during late 2017.

Delivery of the first structural steel for the process plant is scheduled to take place in the March 2018 quarter, as is delivery of the ball mill components, which was undergoing final inspection in Perth as of year-end.

Bore fields

All 32 bores that make up the Yeo bore field, which will serve as the main water source for the Gruyere Process Plant, have now been drilled. Installation of the 95km water pipeline connecting the bores to the Process Plant is scheduled to commence in the March 2018 quarter and the 22kV overhead power line servicing the bore field in the June 2018 quarter.

Plan for Gruyere Project - Australia

Gruyere Project

 

Mineral Resources

The Mineral Resources and Mineral Reserves for the Gruyere deposit were updated by Gold Fields at 31 December 2017. The Resource and Reserve for the ancillary Attila and Alaric deposits have been updated by Gold Road with technical review by GFA. Gold price inputs were consistent across both companies at A$1,850/oz and A$1,600/oz for the Mineral Resource and Mineral Reserve respectively. Mineral Resources and Mineral Reserves are reported in accordance with the requirements of the SAMREC and JORC Codes.

Since assuming operational and management control of the Gruyere JV in January 2017, Gold Fields and the JV management team has initiated further review and technical studies aimed at consolidating and optimising the delivery of the project on time. Project de-risking, contractual agreements and evaluation of additional production and productivity opportunities are ongoing.

Mineral Resource classification

The GFI 50% share, as held by Gruyere Mining Co Pty Ltd, is reported below.

Tonnes (kt)   Grade (g/t) Gold (koz)
Classification Dec 2017   Dec 2016   Dec 2015   Dec 2017   Dec 2016   Dec 2015   Dec 2017   Dec 2016   Dec 2015  
Open pit
Measured 7,175   7,281     1.18   1.29     272   302    
Indicated 48,856   47,685     1.29   1.33     2,030   2,046    
Inferred 19,413   21,855     1.33   1.36     831   959    
Total open pit 75,444   76,822     1.29   1.34     3,134   3,307    

Mineral Reserves classification per mining area

The total project, as well as the GFI 50% share, as held by Gruyere Mining Co Pty Ltd, is reported below.

Proved   Probable Total Mineral Reserve
Mineral Reserves areas Tonnes (kt)   Grade (g/t)   Gold (koz)   Tonnes (kt)   Grade (g/t)   Gold (koz)   Tonnes (kt)   Grade (g/t)   Gold (koz)  
Open pits
Gruyere 14,908   1.09   524   78,853   1.20   3,039   93,761   1.18   3,563  
Attila 323   1.68   17   2,889   1.54   143   3,212   1.55   160  
Alaric       379   1.49   18   379   1.49   18  
Total open pits 15,231   1.11   542   82,120   1.21   3,200   97,352   1.20   3,741  
GFI share 7,616   1.11   271   41,060   1.21   1,600   48,676   1.20   1,871  

Notes:
– All Mineral Resources are completed in accordance with the SAMREC Code and JORC Code 2012 (Attila and Alaric pits)
– All figures are rounded to reflect appropriate levels of confidence. Apparent differences may occur due to rounding
– Mineral Resources are inclusive of Mineral Reserves
– Figures are reported on a 50% attributable basis unless otherwise specified
– All Mineral Resources reported at various cut-off grades according to material type and distance to the Gruyere Mill (in construction). Gruyere – 0.34g/t Au (fresh), 0.30g/t Au (transitional), 0.29g/t Au (oxide) Attila
– All mineral resources are constrained within an $1850/oz optimised pit shell derived from mining, processing and geotechnical parameters that could be realistically applied to these deposits during future economic extraction. In the case of the Gruyere resource, no allowance for an open pit ramp has been included in the geotechnical parameters used to generate the constraining whittle shell

Modifying factors

  • All Mineral Reserves are quoted in terms of RoM grades and tonnages, as delivered to the metallurgical processing facilities, and are therefore fully diluted
  • The Mineral Reserve Statements include only Measured and Indicated Mineral Resources, modified to produce Mineral Reserves that are contained in the LoM plan
  • Mineral Resources and Mineral Reserves undergo regular internal and/or external audits, and any issues identified are rectified at the earliest opportunity – usually during current reporting cycle
  • The Measured and Indicated Mineral Resources are inclusive of Mineral Reserves