Agnew gold mine - Mineral Resources and Mineral Reserves

The Mineral Resources and Mineral Reserves have been updated using the current Gold Fields' planning gold price of A$1,850/oz and A$1,600/oz respectively and reported in accordance with the SAMREC Code. The Mineral Resources are stated inclusive of Mineral Reserves. The majority of geological and evaluation models have been updated to reflect the latest available data sets. An integrated mine design and schedule, based on current performance levels, takes cognisance of the capacities and interdependencies associated with all aspects of the mining operations at Agnew.

Mineral Resources

The Mineral Resources are classified as Measured, Indicated or Inferred, as described in the SAMREC Code. Mineral Resource categories are assigned with consideration given to geological complexity, grade variance, drill hole intersection spacing and mining development. The impacts of year-on-year changes are covered in the reconciliation section.

Mineral Resource classification

  Tonnes (kt)     Grade (g/t)     Gold (koz)  
Classification Dec
2017		 Dec
2016		 Dec
2015		     Dec
2017		 Dec
2016		 Dec
2015		     Dec
2017		 Dec
2016		 Dec
2015		  
Open pit and underground                            
Measured 184 310 1,108     3.85 5.58 4.22     23 56 151  
Indicated 6,751 6,462 9,228     5.75 6.19 5.62     1,248 1,286 1,667  
Inferred 4,508 5,684 5,985     4.57 4.33 4.34     663 791 835  
Total open pit and underground 11,444 12,456 16,321     5.25 5.32 5.05     1,934 2,133 2,652  
Surface                            
Measured stockpiles 89 92 27     4.30 3.08 5.24     12 9 5  
Total surface 89 92 27     4.30 3.08 5.24     12 9 5  
Total 11,533 12,548 16,348     5.25 5.31 5.05     1,946 2,142 2,656  

Mineral Resource classification per source area

  Measured     Indicated     Inferred     Total Mineral Resource  
                                       
Area Tonnes
(kt)		 Grade
(g/t)		 Gold
(koz)		     Tonnes
(kt)		 Grade
(g/t)		 Gold
(koz)		     Tonnes
(kt)		 Grade
(g/t)		 Gold
(koz)		     Tonnes
(kt)		 Grade
(g/t)		 Gold
(koz)		  
Open pit                                      
Miranda pits           82 4.53 12     277 4.34 39     359 4.38 51  
Crusader pits           944 2.81 85     23 4.13 3     967 2.83 88  
Various – other pits 109 2.81 10     407 3.54 46     130 3.69 15     646 3.42 71  
Total open pit 109 2.81 10     1,433 3.12 143     430 4.14 57     1,972 3.33 210  
Underground                                      
Waroonga                                      
Kim 65 5.46 11     421 6.53 88     116 8.21 31     602 6.74 130  
Main           623 7.29 146     129 6.82 28     752 7.21 174  
FBH           1,635 7.36 387     452 5.66 82     2,087 6.99 469  
North           308 11.51 114     228 7.50 55     536 9.86 170  
War. Other           359 5.74 66     231 5.78 43     590 5.75 109  
Other UG 10 4.80 2     621 5.81 116     220 4.52 32     851 5.51 150  
Genesis New Holland                                      
Lower Genesis           266 4.09 35     821 3.62 95     1,087 3.74 130  
Sheba           417 4.15 56     695 3.88 87     1,112 4.02 143  
Upper NH & G           527 4.43 75     715 3.93 90     1,242 4.15 165  
GNH – other           142 4.55 21     472 4.10 62     614 4.22 83  
Total underground 75 5.37 13     5,319 6.46 1,104     4,079 4.61 605     9,472 5.66 1,723  
Surface                                      
Mill Stocks 89 4.30 12                         89 4.30 12  
Grand total 273 4.00 35     6,751 5.75 1,248     4,508 4.57 663     11,533 5.25 1,946  
Modifying factors
  • The Measured and Indicated Mineral Resources are inclusive of Mineral Reserves
  • Mineral Reserves are quoted in terms of RoM grades and tonnages as delivered to the metallurgical processing facility and are therefore fully diluted
  • Mineral Reserve statement includes only Measured and Indicated Mineral Resources, modified to produce Mineral Reserves contained within 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 the current reporting cycle
  • As the Agnew plant has available capacity, incremental cut-off grades are applied from time to time in selected areas, to supplement the mill feed, benefiting the metal output, unit cost, overall cash-flow and infrastructure utilisation
  December  
  Units 2017   2016 2015  
Mineral Resource parameters            
  US$/oz 1,400   1,400 1,500  
Mineral Resource gold price US$/A$ 0.76   0.76 0.86  
  A$/oz 1,850   1,850 1,750  
Cut-off for underground g/t 2.4 – 3.7   2.4 – 3.7 2.7 – 3.3  
Cut-off for open pit g/t 0.80-0.97   0.92-1.06 0.66-0.79  
Mineral Reserve parameters            
  US$/oz 1,200   1,200 1,300  
Mineral Reserve gold price US$/A$ 0.75   0.75 0.84  
  A$/oz 1,600   1,600 1,550  
Cut-off for fresh ore g/t 2.5 – 3.4   2.8 – 4.3 3.2 – 4.1  
Mining recovery factor (underground) % 80 – 93   80 – 95 80 – 95  
MCF % 100   100 100  
Dilution underground % 20   18 15  
Plant recovery factor % 92.4   92.6 94.3  
Processing capacity Mtpa 1.3   1.3 1.3  

The grade tonnage curves for the surface and underground Mineral Resource are presented below.

Grade tonnage curve - Underground   Grade tonnage curve - Surface
Grade tonnage curve - Underground   Grade tonnage curve - Surface
Mineral Reserves

The Mineral Reserve estimate for Agnew is based on an appropriately detailed and engineered LoM plan. All design and scheduling work is undertaken to an appropriate level of detail by experienced engineers using appropriate mine planning software. The planning process incorporates realistic modifying factors and the use of appropriate cut-off grades, geotechnical criteria, mining fleet productivities and other techno-economic investigations.

The current operational plan reflects mining at both the Waroonga and New Holland complexes, with mining sourced from the Kim South, Main Lode, FBH, Cinderella, New Holland, Genesis and Sheba areas.

Mineral Reserve classification

  Tonnes (kt)     Grade (g/t)     Gold (koz)  
Classification Dec
2017		   Dec
2016		 Dec
2015		     Dec
2017		   Dec
2016		 Dec
2015		     Dec
2017		   Dec
2016		 Dec
2015		  
Open pit and underground                                  
Proved 24   138 242     4.92   5.41 8.84     4   24 69  
Probable 2,923   2,742 3,110     5.58   5.47 5.96     525   482 596  
Total open pit and underground 2,947   2,880 3,352     5.58   5.46 6.17     529   506 665  
Surface stockpiles                                  
Proved 89   92 27     4.30   3.04 5.24     12   9 5  
Total surface 89   92 27     4.30   3.04 5.24     12   9 5  
Grand total 3,037   2,972 3,379     5.54   5.39 6.16     541   515 670  

Mineral Reserve classification per mining area

  Proved     Probable     Total Mineral Reserve  
Mineral Reserves areas Tonnes
(kt)		 Grade
(g/t)		 Gold
(koz)		     Tonnes
(kt)		 Grade
(g/t)		 Gold
(koz)		     Tonnes
(kt)		 Grade
(g/t)		 Gold
(koz)		  
Underground                            
Waroonga – FBH — — —     1,248 6.23 250     1,248 6.25 250  
Waroonga – Kim and                            
Edmunds 2 4.68 —     356 5.23 60     358 5.28 61  
Waroonga – Main, Main                            
South, Rajah — — —     338 4.60 50     338 4.56 50  
Waroonga – War North and                            
Kath — — —     528 6.78 115     528 6.79 115  
Waroonga – total 2 4.68 —     2,471 5.98 475     2,473 5.99 476  
GNH – total 22 4.95 4     156 4.30 22     178 4.38 26  
Total underground 24 5.20 4     2,627 5.89 497     2,651 5.87 501  
Surface                            
Total open pits — — —     297 2.94 28     297 2.94 28  
Agnew surface stockpiles 89 5.24 12     — — —     89 4.15 12  
Grand total 113 4.43 16     2,924 5.58 525     3,037 5.54 541  

Note:

The reduction in Measured and Proved ounces at Agnew is predominantly due to depletion of the Kim ore body in conjunction with a deliberate move to 'just in time' ore development and stoping at FBH adopted to reduce costs associated with local ground support and geotechnical stability. The impact is a reduction in advanced mine definition drilling at FBH and consequently less Proved Reserve but this is compensated for with detailed face sampling and grade control drilling prior to finalising stope designs

Mineral Resource and Mineral Reserve reconciliation year-on-year

Factors that affected Mineral Resource reconciliation year-on-year

Factors that affected Mineral Reserve reconciliation year-on-year

Mining depletion in 2017

  

Mining depletion in 2017

Infill drilling resulted in additions at Waroonga North, Kath, FBH, Cinderella, Kim with decreases at Sheba, Main and Himitsu

  

Discovery at Waroonga North and FBH

Reductions due to resource modelling at Upper New Holland, Main and Rajah

  

Infill drilling and resource model updates increased Reserves at FBH, Waroonga North, Cinderella and Kath

Sterilisation around mined stopes at Kim and FBH

    

Mineral Resource reconciliation (Gold – koz)   Mineral Reserve reconciliation (Gold – koz)
Mineral Resource reconciliation (Gold – koz)   Mineral Reserve reconciliation (Gold – koz)

Schematic north-south cross-section through the New Holland/Genesis ore bodies and mine workings

 

Mineral Reserve sensitivity

To illustrate the impact of fluctuations in gold price and exchange rates on the current declaration, Agnew has generated sensitivities with respect to Mineral Reserves. The following graph indicates the Managed Mineral Reserve sensitivity at -15%, -10%, -5%, +5%, +10% and +15% to the base (A$1,600/oz) reserve gold price.

These sensitivities (other than for the base case) are not supported by detailed plans and depletion schedules. They should only be considered on an indicative basis, specifically as such sensitivities assume 100% selectivity, without any operating cost increases.

Mineral Reserve sensitivity (Gold – Moz)

Schematic north-south long-section through the Waroonga ore bodies