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Gold Fields advances projects to 'underwrite a better future' - Mining Weekly

Friday, 17 August 2018

JOHANNESBURG ( – NYSE- and JSE-listed Gold Fields aims to continue building new projects that will “underwrite a better future for [the miner] in terms of a longer life at lower costs”.

This, CEO Nick Holland said during a conference call on Thursday, is particularly important, given the volatility of the gold price.

While the integrity of the gold miner’s balance sheet remaining intact after funding cumulative project expenditure, he pointed out that the company’s international portfolio continues to remain strong, and that it is underpinning the company.

Gold Fields’ Damang reinvestment project, in Ghana, continued to track well against the plan for the six-month period to June 30, with total tonnes mined 26% higher year-on-year at 23.9-million tonnes, which Holland said was “slightly ahead of plan”.

Gold produced at Damang increased by 16% year-on-year to 89 500 oz, which was driven by higher grade material mined and processed during the half year.

Capital expenditure (capex) was 9% higher year-on-year at $73-million, with $61-million spent on capital waste stripping and the balance spent on engineering projects.

All-in sustaining costs (AISC) for the project decreased by 18% year-on-year to $829/oz while all-in costs (AIC) decreased by 7% year-on-year to $1 585/oz.

The potential at Damang’s Amoanda Phase 2 infill drilling and construction of the Far East tailing storage facility continues to increase, the miner said, which follows a successful drilling campaign which will provide additional flexibility to the operation when the main Damang pit starts production in the second quarter of 2019.

Meanwhile, first gold at the Gruyere gold project, in Australia, remains scheduled for the June 2019 quarter, Holland added.

However, the final forecast capital (FFC) is now estimated at A$621-million which includes scope changes and force majeure costs of A$30-million along with a contingence of the same amount.

This compares with the original budget of A$532-million, with A$329-million spent on the project to date. A$185-million is expected to be spent in the second part of this year.

Despite the increased capital for the project, Gold Fields maintains that the long-life, low-cost nature of Gruyere will subsequently improve the Gold Fields portfolio.

Overall project engineering and construction was 94% and 61% complete, respectively, with engineering, procurement and construction (EPC) 39% complete as at the end of July 2018.

Meanwhile, the feasibility study for Salares Norte, in Chile, is on track for completion at the end of this year.

The mine is expected to produce 3.5-million gold equivalent ounces over a ten-year life at an average AISC of about $575/oz and initial capex of $850-million.

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