The mine planning cycle
Strategic context and planning
The intent of the strategic planning process is to provide a mechanism for operating sites to assess planning options at varying levels of technical, operational and financial risk, with reference to the company's strategic goals. Strategic key performance indicators for each asset are pivotal around quality, life, licence to operate, cash generation and scale, based on either annual metal produced or cash-flow. Our strategic planning aims to provide insight to a range of outcomes rather than refine and optimise a single option.
Optionality is assessed against strategic scenarios that profile (1) low metal price; (2) sustaining the business; (3) upside potential; and (4) blue sky opportunity and they provide essential guidance for operating strategies, required investment and risk and reward management. By necessity, the strategic plans include an assessment of factored Inferred Mineral Resource and a view on property endowment potential for the blue sky, in addition to the Proved and Probable Mineral Reserve that defines the LoM plan.
In 2017, all sites presented internal growth options as part of Gold Fields' strategic planning process. This process allowed Gold Fields' management to rank projects and allocate capital to projects consistent with the Gold Fields strategic goals and provide guidance as to which projects have the capacity to improve the portfolio.
Gold Fields' strategy focuses on maintaining a sustainable cash-flow margin through inevitable economic cycles that are inherent in the industry. Key strategic themes include the following:
- Meet production and cost guidance consistently
- Life extensions at our operations through brownfields exploration
- Value-accretive portfolio management
- Continued growth to achieve the strategic goals whilst maintaining capital discipline
- Capital spend of approximately US$800M in 2018 to execute existing development projects including the Damang reinvestment in Ghana, Gruyere mine in Australia and the South Deep rebase plan
- Execution of the Company's modernisation programme via the Innovation and Technology (I&T) strategy
- Progress the Salares Norte feasibility study
- Progress the palaeochannel PFS at St Ives
Each year, the business plan represents a refinement of the preferred strategic plan option and the process allows each site to develop a 12-month operational plan. This is done in the context of the long-term potential of the asset and allows the business to deploy essential resources to maximise the use of capital across the Group portfolio. The business plan includes factored Inferred Mineral Resources that provide essential information on the realistic Mineral Resource to Mineral Reserve conversion in the medium to long term.
In accordance with the SAMREC Code, the compliant Mineral Resource and Mineral Reserve that defines the LoM plan and cash-flow model for each asset is restricted to Proved and Probable Reserves. Importantly the LoM plan and resultant Mineral Reserves demonstrate a strong linkage to the strategic and business plans that profile the Company's medium to longer-term approach to realising full site potential.