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Gold Fields says Salares Norte project to miss year-end target owing to weather, Covid-19 - Miningmx

Thursday, 11 November 2021

GOLD Fields said its Salares Norte gold project in Chile would fall short of its year-end 65% completion target owing to ten days lost to heavy snow and a lack of employee availability owing to the Covid-19 pandemic.

Commenting in an operational update for the three months to end-September, Gold Fields CEO Chris Griffith said however the project remained on track to produce first gold in the first quarter of the 2023 financial year.

The project would be 62% complete by the end of December.

Griffiths added that the project had not suffered the effects of strangled supply lines that are being experienced globally, especially from the strain placed on freight and shipping. More than 95% of imported components have arrived in Chile.

Once developed, Salares Norte will produce average annual production of 450,000 ounces of gold equivalent over the first seven years.

Gold Fields produced 606,000 ounces of gold in the third quarter, a 9% improvement year on year and 8% higher than in the second quarter.

Revenue, excluding its 50% share in the Ghana mine Asanko Gold, was slightly down at about $1.77bn (Q2: $1.8bn), but all-in sustaining costs (AISC) were improved. They came in at $1,016 per ounce for the quarter compared to $1,107/oz in the second quarter.

The group is on track to meet production and cost guidance of between 2.3 to 2.35 million oz at an AISC of between $1,020/oz to $1,060/oz. Excluding "very significant project capex at Salares Norte", all-in costs are expected to be $1,090/oz to US$1,130/oz, said Gold Fields.

The group's South Deep mine in South Africa had a strong quarter. Production increased 30% quarter on quarter to 88,200 oz as a result of improved volumes, improved grade and improved yield.

The higher volumes were a result of improved stoping volumes whilst the improvement in  grade was as a result of the better volume mix relative to the June quarter and in line with the annual mine plan, said Gold Fields.

Commenting on the Covid-19 situation in South Africa, Gold Fields said it was considering the possibility of mandatory vaccinations. The practice is unlawful in Peru, where the company operates the Cerro Corona mine, and not viable in Ghana owing to low levels of available vaccines, but it is implemented at the firm's Australian assets.

In August, Griffith  ended speculation he could look differently on South Deep saying the 280,000 ounce a year operation was "a franchise asset" that had a place in the group "for many years to come".

The mine has failed to deliver for years and was heavily restructured just over three years ago. It was thought that Griffith might not show the loyalty to the asset of former Gold Fields CEO Nick Holland who was involved in buying it from Barrick in 2007.

Griffith, the former CEO of Anglo American Platinum, took over from Holland in April.

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