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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 (12 years), low-cost gold project, with construction nearing completion and trial milling due to commence in Q1 2019.

Mineral Resource

3.3Moz gold*

Mineral Reserve

1.9Moz gold*

* The 50% share, attributable to Gold Fields

  • The Gruyere project in Western Australia is a 50:50 JV between Gold Road Resources and Gruyere Mining Company (Pty) Ltd, a wholly-owned Australian subsidiary of Gold Fields
  • Updated resource modelling in 2018 demonstrated robust geology and stable Reserves from the primary production pit
  • First ore production from Gruyere is expected in early 2019 and first gold remains on target for Q2 2019

Asset fundamentals

General location  

The Gruyere deposit, centred at latitude 27°59’S and longitude 123°50’E, within the Yamarna Terrane of the eastern Yilgarn, Western Australia. Gruyere is located 200km east of Laverton and 1,000km NE of Perth.

Licence status and holdings  

The project, with granted tenements for mining, exploration and miscellaneous of 200,355ha, 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.

Local geology and 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 3.79Moz Mineral Reserve (1.89Moz attributable to GFI), supporting average annual gold production of circa 300,000 (50% attributable to GFI) ounces over a 12-year LoM.

Sustainable development  

An external auditor carried out a pre-operational compliance audit of Gruyere and recommended the project for Pre-Occupational Code certification. It is intended to submit the auditor’s recommendation to the ICMI by Q1 2019.

Brief history

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

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 after forming a JV with Gold Road Resources in November 2016. The JV, comprising more than 200,000ha 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 2018, additional declared Mineral Resources include the Central Bore, Montagne, Orleans and Argos on the YSZ and YAM14 on the DHSZ.

2017/2018 exploration expenditures are presented in the Australia regional section.

Geology

The Gruyere deposit is located on a flexure point of the regional-scale DHSZ within the Dorothy Hills Greenstone Belt, where the shear zone changes from a northerly direction to a NNW direction. Orogenic gold mineralisation is hosted within the steep easterly dipping Gruyere Porphyry, a mediumgrained 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 1.2g/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 microfracturing and steeply dipping quartz veining.

YAM14 is located 8km south of the Gruyere deposit and similarly is located on a flexure of the DHSZ. Mineralisation at YAM14 is shear related and hosted within an intermediate sedimentary package at the contact with a rhyolitic tuff. Elevated gold grades are associated with shearing, increased quartz veining and albite-chlorite‐pyritearsenopyrite alteration.

Gold mineralisation within the Attila – Alaric trend (Attila, Alaric, Montagne, Argos and Orleans projects) comprises steeply dipping shear hosted gold in volcaniclastic sequences, with gold associated with zones of albite ± sericite ± chlorite ± pyrite mineralisation.

Central Bore is located approximately 3.7km east of Attila. Local geology at Central Bore consists of sub-vertical dipping andesitic volcanics and porphyritic tuffs with a N-S trend. Gold mineralisation is sub-vertical and restricted to a single, narrow shear zone (~1 – 2m) characterised by carbonate veinlets, alteration and fine-grained sulphides, in particular molybdenite.

Project progress update

An FS was completed on the project in October 2016, which showed a 3.52Moz Mineral Reserve, supporting an average annual gold production of 270koz (50% attributable to Gold Fields) over an LoM of approximately 12 years.

With early works at Gruyere having started in December 2016, construction has now been in progress for more than 24 months. Importantly, the project remains on target to pour maiden gold within the June quarter in 2019. The revised total expected project cost estimate is A$621M (US$480M) (level of accuracy range ‐2% / +2%). Engineering and construction programmes were 97% and 85% complete, respectively, by the end 2018.

In Q1 2018, mining services contractor, Downer EDI Mining (Pty) Ltd (Downer), mobilised a small number of staff to site to begin work on establishing infrastructure facilities, such as workshops to service the mobile mining fleet.

In early November 2018, Downer mobilised a larger contingent to site and commenced mining operations. Mining, with a single excavator and truck fleet, is initially focusing on completing the pre‐strip and second stage RoM pad development, with first ore to be mined in the March 2019 quarter. The Gruyere JV expects mining rates to peak at approximately 30Mtpa in 2023 and average 16Mtpa over mine life, utilising a fleet of 225t payload dump trucks, 400t excavators, production blast hole drills and support equipment. Downer will have a peak workforce of 170 personnel engaged on the project.

Project construction progress in 2018

Gas pipeline

Final approval from the WA Department of Mines, Industry Regulation and Safety for the construction of the 198km Yamarna Gas Pipeline (YGP) was approved in Q4 2017. Construction of the YGP, which was carried out by Nacap Australia (Pty) Ltd on behalf of APA Group; which will own and operate the asset, was completed ahead of schedule during Q2 2018. All generators and gas engines have been installed at the 45MW Gruyere Power Station which has been connected to the YGP. The power station was fully commissioned in Q4 2018.

Bulk earthworks

Bulk earthworks have continued to make good progress, with the contractor completing several key components.

In February 2018, the Gruyere airstrip received Civil Aviation and Safety Authority certification and, to facilitate low‐cloud cover and night‐time landings, received its Area Navigation certification at the end of April 2018. The airstrip is now classed as an all‐weather airstrip that can accommodate jet aircraft carrying up to 100 passengers.

In June 2018, MACA Limited performed the bulk earthworks at Gruyere, completed both the first stage of the RoM pad work and the construction of the TSF embankment walls. Fill material for both projects was derived from pre-strip material sourced from the Gruyere pit.

MACA further completed the TSF construction, focusing on installation and completion of the liner works during Q4 2018, in line with the project schedule.

Engineering, procurement and construction

The engineering, procurement and construction (EPC) contractor, ACJV continues to deliver plant construction to a high quality, with EPC 81.6% complete as at Q4 2018.

All civil and concrete works for the process plant are complete (approximately 21,500m3 of concrete poured since the start of construction) with structural steel, plate steel and tankage nearing completion. The major equipment and materials required to complete construction are on site. Remaining works on piping, electrical and instrumentation and delivery of plant systems are on track for commissioning, which commences in Q1 2019.

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, were completed in 2017. Installation of the 95km water pipeline connecting the bores to the Process Plant was completed in Q4 2018. Flow rate testing on the Yeo water bores shows flow rates in line to slightly above FS estimates.

Limited work to complete the process water supply bore fields and associated pipelines is ongoing. Civil works on the TSF and installation of the tailings decant recovery pipelines have been completed.

Installation of all power poles and 22kV overhead power line by Powerlines Plus was completed slightly ahead of schedule. Electricity to the Yeo bore field was gradually introduced during Q4 2018. Borefield commissioning scheduled to commence early in Q1 2019, aligned with the initial ore processing schedule.

Permitting and environmental

The project proposal underwent formal environmental assessment by the Office of Environmental Protection Authority (OEPA) under Part IV of the Environmental Protection Act 1986 (EP Act).

The Assessment on Proponent Information, Category A (API-A) that was required for the project was prepared. The management and protection of stygofauna (aquatic fauna that live in groundwater systems or aquifers) that have been identified in the Yeo bore field area of the project was the key environmental factor identified by OEPA that required formal impact assessment. Final project EPA Part IV approval was received December 2016. No commonwealth Environmental Assessment was required under the Environment Protection and Biodiversity Conservation Act.

A Project Management Plan, Mining Proposal and Mine Closure Plan detailing information on identification, evaluation and management of environmental impacts relevant to the project and the surrounding environment was submitted to DMP and approval granted in February 2017. In parallel with these proposals, the project received various works approvals and licences for construction and operation of prescribed premises under Part V of the EP Act. These approvals from the Department of Environment Regulation were received in February 2017.

Opportunities for sustainability are being investigated on the back of the Gruyere Central Bore Native Title Agreement which was signed with the Yilka and Cosmo Newberry Aboriginal Community in May 2016. As registered custodians of the Yamarna area, the Yilka people will realise employment, contracting and training opportunities throughout the life of the project.

Operational readiness

While project construction is underway, the Gruyere JV operational senior management team has been established. The focus of this team is to acquaint themselves with the project details and evaluation, plus review and establish the future operational systems, processes and practices that will enable safe, sustainable and operational efficiencies in a new world-class mine.

Interim early-stage grade control drilling was completed in late 2017 with results returned in Q1 2018. This has provided advanced information on short-scale ore distribution to optimise short-term mining plans. Mining standards and protocols, stockpiling strategies and equipment monitoring plus maintenance software systems are being assessed and evaluated to support operational readiness.

Future staffing, skills and competency assessments, with a recruiting plan for operational start up in early 2019, are underway.

Innovation and technology

Gruyere’s current focus is on the following:

  • Emphasis on the latest drone technology for a connected mine to allow spatial and volume compliance
  • Application of operational controls including Blast Movement Monitors and fragmentation monitoring
  • Options for grade bin stockpiling and elevated cut-over grades
  • Geotechnical data collection and analysis that may ultimately justify pit wall steepening improvements

Key developments and material issues

  • Despite disruptive above average rainfall in February 2018, there was significant progress on constructing and developing the mine including completion of the Gruyere airstrip, main access road, stage 1 pit and early TSF earthworks and commencement of the Yeo bore field
  • Emphasis has been on optimising critical engineering, fabrication and field productivity work in H2 2018 to meet the key project milestones, and first gold is on track for Q2 2019
  • The 198 Yarmarna Gas Pipeline was completed in June and commissioning of the 45MW gas-fired Gruyere Power Station was completed in Q3 2018, both ahead of schedule
  • Grade control (GC) drilling was successfully completed for initial open pit mining and will be continued as a routine part of the mining cycle to improve geological and grade resolution
  • The Gruyere JV operations team has developed an execution plan to support the production ramp‐up to near name plate capacity. Any delay in the commissioning or ramp-up will have some impact on the 2019 plan
  • Projected improvements to the Gruyere LoM average annual production indicates approximately 300kozpa
  • Continued exploration activities on the Gruyere JV tenements focused on Resource and Reserve development across the 14km Golden Highway Trend
  • The Atilla and Alaric satellite open pit studies aim to support ore delivery in circa 2024
  • Infill resource drilling was completed at the Montagne and Argos deposits, resulting in Mineral Resource and PFS updates. These satellite open pits potentially complement the long‐life Gruyere mine plan

Mineral Resources

The Mineral Resources and Mineral Reserves for the Gruyere deposit were updated by Gold Fields as at 31 December 2018. The Resource and Reserve for the ancillary Attila and Alaric deposits have been updated by Gold Road with technical review by GFA. The Resources for Central Bore, YAM14, Montagne and Orleans have been updated by Gold Road with technical review by GFA. Mineral Resources and Mineral Reserves are reported in accordance with the requirements of the relevant reporting codes (SAMREC and JORC covering the JV) .

Since assuming operational and management control of the Gruyere JV in January 2017, Gold Fields and the JV management team have 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
2018
  Dec
2017
Dec
2016
  Dec
2018
  Dec
2017
Dec
2016
  Dec
2018
  Dec
2017
Dec
2016
 
Open pit                              
Measured 8,365   7,175 7,281   1.18   1.18 1.29   318   272 302  
Indicated 49,930   48,856 47,685   1.32   1.29 1.33   2,123   2,030 2,046  
Inferred 19,391   19,413 21,855   1.39   1.33 1.36   864   831 959  
Total open pit 77,685   75,444 76,822   1.32   1.29 1.34   3,305   3,134 3,307  

MINERAL RESOURCE 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.


  Measured   Indicated  
Area Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
  Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
 
Open pits                
Gruyere 16,441 1.17 618   88,529 1.30 3,705  
YAM14   227 1.38 10  
Alaric   1,537 1.70 84  
Montagne   3,137 1.27 128  
Argos   1,191 1.26 48  
Orleans    
Attila 289 1.99 18   5,237 1.61 270  
Total open pits 16,730 1.18 637   99,859 1.32 4,246  
GFI share 8,365 1.18 318   49,930 1.32 2,123  
Underground                
Central Bore    
Total open pit & underground                
Grand total 16,730 1.18 637   99,859 1.32 4,246  
GFI Share 8,365 1.18 318   49,930 1.32 2,123  

  Inferred   Total Mineral Resource  
Area Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
  Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
 
Open pits                
Gruyere 34,590 1.31 1,458   139,560 1.29 5,781  
YAM14 626 1.15 23   854 1.21 33  
Alaric 841 1.22 33   2,378 1.53 117  
Montagne 75 1.03 2   3,212 1.26 130  
Argos 974 1.13 35   2,165 1.20 84  
Orleans 1,006 1.64 53   1,006 1.64 53  
Attila 428 1.60 22   5,955 1.62 311  
Total open pits 38,540 1.31 1,627   155,129 1.31 6,510  
GFI share 19,270 1.31 813   77,565 1.31 3,255  
Underground                
Central Bore 242 13.05 101   242 13.05 101  
Total open pit &                
underground                
Grand total 38,781 1.39 1,728   155,371 1.32 6,611  
GFI Share 19,391 1.39 864   77,685 1.32 3,305  

Notes:

  • All Mineral Resources are completed in accordance with the SAMREC Code and JORC Code for Gruyere, Attila, Alaric, Montagne, Orleans, Central Bore, Argos and YAM14)
  • 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 open pit Mineral Resources reported at various cut-off grades. 0.30g/t gold (Gruyere), 0.40g/t gold (YAM14), 0.50g/t gold (Attila, Alaric, Montagne, Argos and Orleans) and constrained within A$1,850/oz optimised pit shell derived from mining, processing and geotechnical parameters that could be realistically applied to these deposits during future economic extraction. No allowance for an open pit ramp has been included in the geotechnical parameters used to generate the constraining whittle shells. Gruyere ore body is insensitive to minimum mining width constraints
  • The only underground Mineral Resource, Central Bore, is reported within economically optimised shapes, applying a gold price A$1,850/oz, against a cut-off grade of 3.5g/t and minimum mining width of 1.5m

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
      December  
  Units   2018   2017 2016  
Mineral Resource parameters              
Mineral Resource Au price US$/oz   1,400   1,400 1,275  

A$/oz
  1,850
  1,850 1,700  
Cut-off for open pit g/t   0.3 – 0.5   0.34 0.5  
Mineral Reserve parameters              
Mineral Reserve Au price US$/oz   1,200   1,200 1,125  
  A$/oz   1,600   1,600 1,500  
Cut-off for mill feed open pit g/t   0.3 – 0.7   0.42 0.43  
Strip ratio (waste:ore) ratio   2.80   2.80 2.77  
MCF %   100   100 100  
Dilution open pit %   4.9   4.9 3.2  
Plant recovery factor %   91   91 91  
Processing capacity Mtpa   7.5 - 8.8   7.5 7.5  
Grade tonnage curve – 100% of all surface deposits

MINERAL RESERVE 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
2018
  Dec
2017
Dec
2016
  Dec
2018
  Dec
2017
Dec
2016
  Dec
2018
  Dec
2017
Dec
2016
 
Open pit                              
Proved 8,581   7,616 7,435   1.13   1.11 1.09   311   271 260  
Probable 38,541   41,060 38,350   1.28   1.21 1.21   1,584   1,600 1,500  
Total open pit 47,122   48,676 45,785   1.25   1.20 1.20   1,894   1,871 1,760  

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  
Area Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
    Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
    Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
 
Open pits                            
Gruyere 16,838 1.11 604     73,815 1.27 3,006     90,653 1.24 3,610  
Attila 323 1.68 17     2,889 1.54 143     3,212 1.55 160  
Alaric     379 1.50 18     379 1.48 18  
Total open pits 17,161 1.13 621     77,082 1.28 3,167     94,244 1.25 3,788  
GFI share 8,581 1.13 311     38,541 1.28 1,584     47,122 1.25 1,894  

Notes:

  • The Mineral Reserve is completed in accordance with the SAMREC and JORC Codes
  • Gold Road holds an uncapped 1.5% net smelter return royalty on Gold Fields’ share of production from the Gruyere project JV once total gold production exceeds 2Moz
  • The Mineral Reserve for the Gruyere deposit is evaluated using a gold price of A$1,600/oz and is reported above a 0.3g/t grade. Attila is reported above the following variable cut-off grades: 0.70g/t gold (fresh), 0.60g/t gold (transition), 0.55g/t gold (oxide). Alaric is reported above the following variable cut-off grades: 0.67g/t gold (fresh), 0.62g/t gold (transition), 0.57g/t gold (oxide)
  • Ore block tonnage dilution averages and gold loss estimates: Gruyere – 4.9% and 0.4%; Attila – 14% and 3%; Alaric – 20% and 6%
  • figures are rounded to reflect appropriate levels of confidence. Apparent differences may occur due to rounding

Plan for Gruyere Project - Australia

Gruyere Project