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Production at JSE-listed Gold Fields’ South Deep gold mine, in South Africa, increased again in the third quarter to 61 000 oz, up 23% year-on-year and 6% quarter-on-quarter.
CEO Nick Holland on Friday said the mine was likely to exceed its production guidance for the full-year by between 5% and 10%.
Encouragingly, the all-in cost (AIC) at South Deep decreased to $1 258/oz, which enabled the mine to be cash positive in the third quarter.
Holland noted that there had been continued improvement in a number of enabling activities at the mine including destress mining, long hole stoping and the placement of backfill.
Gold Fields concluded a restructuring process at South Deep at the end of 2018, which was now bearing fruit.
Meanwhile, the company’s total equivalent gold production for the quarter was 523 000 oz, which was 2% lower year-on-year and 3% lower quarter-on-quarter.
Production was impacted on by an unusually high lock-up of gold in circuit at two of the company’s Australian operations; lower grades at the Damang mine, in Ghana, as the mine transitions to the main pit; and lower grades at the Cerro Corona mine, in Peru.
The Australian operations contributed 210 000 oz to production for the quarter under review, with the Gruyere mine having contributed for the first time.
Although production in this region was 6% lower year-on-year, the company recovered 7 000 oz after quarter-end, which it said would improve production numbers for the fourth quarter.
Holland noted that, given higher throughput rates and gold recoveries than expected at Gruyere at the end of the quarter under review, gold production for the full-year should reach the upper end of guidance of about 100 000 oz.
The St Ives mine, in Australia, contributed 75 200 oz to production in the quarter under review, while Agnew and Granny Smith contributed 50 400 oz and 69 700 oz, respectively.
Ghana’s production of 205 000 oz was 5% higher year-on-year, but down 5% quarter-on-quarter. Holland stated that as the reinvestment project at Damang progresses, the mine is transitioning through the anticipated lower and more variable-grade Huni sandstone lithology, which impacted on production in the quarter.
The Tarkwa mine contributed 127 300 oz in the quarter under review, while the company’s Asanko joint venture, both in Ghana, contributed 62 400 oz.
Gold Fields’ gold equivalent production at Cerro Corona was 22% lower year-on-year and 19% lower quarter-on-quarter, at 65 000 oz, owing to lower grades mine and a lower price factor.
Consequently, the mine’s AIC for the reporting quarter was $929/oz, which was 34% higher year-on-year and 29% higher quarter-on-quarter.
Meanwhile, the environmental-impact assessment process was progressing well for Salares Norte, in Chile, and the company expected it to be granted before mid-2020.
Gold Fields was evaluating the possibility of bringing in a partner for the project, while detailed engineering was 47% complete at the end of the reporting quarter.
The company expected to end this year on a strong footing and to achieve production and AIC guidance for the year.
"This will provide us with a strong base to grow production and reduce AIC into 2020, enabling the company to generate strong free cash flow.
"Attributable equivalent gold production for 2019 is expected to be at the upper end of the range, about 2.18-million ounces. AIC is likely to be between $1 075/oz and $1 095/oz."