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South Deep is Gold Fields' star performer - Mining Weekly

Thursday, 11 November 2021

JOHANNESBURG (miningweekly.com) – Mechanised underground Gauteng gold mine South Deep has been hailed by a solidly performing Gold Fields as its star in the three months to September 30.

Gold Fields CEO Chris Griffith singled out the 75-year-life West Rand gold mine's 30%-higher quarter-on-quarter performance when he reported solid third-quarter combined group output of 606 000 oz, which was up 9% year-on-year and up 8% quarter-on-quarter.

Moreover, despite planned quarter-four maintenance activities, South Deep remains on track to meet guidance, Gold Fields stated in a release to Mining Weekly.

South Deep produced 88 000 oz at an all-in cost (AIC) of $1 208/oz or R567 550/kg and all-in sustaining cost of $1 155/oz or R542 660/kg.

Gold mined increased by 14% to 90 700 oz in the September quarter from 79 700 oz in the June quarter on the increase in ore tonnes mined and improved broken grade.

Reef yield increased by 18% to 6.30 g/t and total underground tonnes milled increased by 13% to 475 000 t, while surface tonnes milled decreased by 19% to 280 000 t owing to cyanide shortages.

Development increased by 23% to 1 640 m and destress by 5% to 11 732 m. South Deep also did well to lift the installation of secondary support by 22% to 4 343 m, in line with improved development and destress performance. Backfill increased by 7% to 83 475 m3 on upped stope availability.

South Deep remains on track to meet the revised guidance provided with the first-quarter 2021 operating update, despite certain maintenance activities planned in the 2021 fourth quarter.

UP AND DOWN IN WEST AFRICA

The West African gold operations of Gold Fields in Ghana were up and down, in terms of both production and costs. Tarkwa's output was up by 1% to 135 700 oz,  Damang's was 9% down at 56 400 oz and the Asanko joint venture was also 2% down at 49 500 oz on a 100% basis.

Tarkwa's AIC decreased by 10% to $1 091/oz , Damang's AIC increased by 6% to $879/oz and Asanko's AIC increased by 6% to $1 697/oz.

UP AND DOWN IN AUSTRALIA

In Australia, third-quarter gold production increased by 24% to 78 900 oz at the Granny Smith gold mine and by 12% to 59 400 oz at Gruyere, but fell by 12% at Agnew to 53 800 oz and by 1% at St Ives to 94 000 oz.

On the costs front, AIC fell 18% to $1 015/oz at Granny Smith and by 5% to $996/oz at St Ives, but rose by 12% to $1 322/oz at Agnew and by 8% to $1 281/oz at Gruyere.

HIGHER GRADES IN SOUTH AMERICA

Gold equivalent production of Cerro Corona in Peru, increased by 31%, to 69 400 oz, on mainly higher gold and copper grades and higher recoveries as a result of better metallurgical conditions.

Gold grades mined increased by 15% and copper grades by 5% and gold yield increased by 40% to 0.60 g/t in the September quarter from 0.43 g/t in the June quarter. Copper yield increased by 20% to 0.42% in the same period.

Up by 21% to $342/oz was AIC on mainly a lower copper by-product credit and higher capital expenditure (capex). Sustaining capex increased by 84% to $9-million in the September quarter on construction activities at the tailing storage facility. Non-sustaining capex increased by 20% on construction at two waste storage facilities.

SALARES NORTE PROJECT SETBACKS

Covid and snowfall negatively impacted construction progress at Gold Fields' Salares Norte gold project in Chile. Covid constrained workforce availability and 10 days were lost to snow-related setbacks.

While it is unlikely that the project will meet the previously guided 65% completion milestone by the end of this year, the project remains on track to deliver first gold by the end of the first quarter of 2023.

Process plant construction centred on the crusher and conveyor foundations, stockpile tunnel concrete pouring and backfilling.

The semi-autogenous grinding, or SAG, mill and the ball mill foundations were completed and mechanical installation commenced. Structural steel installation at the grinding area progressed and the bridge crane was erected. Installation of three leaching tanks and five carbon-in-pump tanks commenced, plant thickener foundations were completed, mechanical erection was initiated and filter plant precast and concrete work done.

The main building structure for the heavy mining equipment workshop was completed with the focus shifting to the completion of electrical and auxiliary buildings.

Work on a 9 km steel pipeline to supply fresh water was almost completed, with the civil works for the pumping stations advanced.

Pre-stripping of the Brecha Principal pit increased to 12.7-million tonnes and waste stripping increased to 6.6-million tonnes.

Third-quarter exploration of the greater district cost $4.7-million with drilling totalled 2 273 m.

Relocation of chinchillas, near-extinct rodents which are protected by Chilean law, remains on hold until further notice from the authorities.

NET DEBT DOWN

Gold Fields remains in a strong financial position. During the third quarter, its net debt balance, including leases, fell further to $1 037-million, even after taking into account the interim dividend payment of $132-million. This translated in a net debt to earnings of 0.44x, compared with 0.49x in the prior period to end June. The net debt balance, excluding leases, fell to $620-million from $663-million as at end June.


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