South Deep gold mine - Key developments and material issues

2017 was the first year of the rebase plan, which was announced in February 2017, and was met by a number of challenges reflected in the mine tracking below some key operational metrics incorporated into the production ramp-up plan. It should be noted that production was hampered by:

  • Two fatalities occurred in the first quarter of 2017
  • Three fall of ground incidents that impacted production from a high grade section of the mine

Importantly, production in the second half of the year improved by 36% compared to the first half of the year, as efficiencies gained more traction and increased momentum in line with improved operational stability. 2018 will see a critical focus on realising the operational capacity and business culture required to deliver the rebase plan, which indicates steady state production levels and cost parameters being achieved by approximately 2022. Ensuring all the necessary enabling activities are in place is vital in support of the plan and emphasis on development cycles, support, backfill, remnant mining systems, equipment availability and ventilation, among others, will continue to facilitate the production ramp-up.

2017 was an important year in addressing outstanding technical issues and good progress was achieved on several fronts. The emphasis has now moved from designing and confirming technical mining parameters to focusing on implementation and operational execution. The mine showed the ability to extract secondary stopes, an important aspect supporting the planned mine sequencing and extraction rates. Effective mining of the high profile destress cut with improved support design was also demonstrated in 2017, with a global increase in stability, and 2018 will focus on driving the destress productivity to the levels needed to ensure the availability of areas for stoping.

In addition, 2017 was successful in the establishment of a production engineering department and short-term interval control management system to assist with enhanced stope design and scheduling, ground support and improved stoping quality metrics.

South Deep’s LoM plan incorporates a transition from the CM to the NoW area as the rebase plan progresses toward steady state. CM ramps down in its contribution to the production profile over the next 10 years as NoW ramps up to provide the volume uplift to reach steady state production levels. CM is characterised by selective mining methods scattered over a large area with abundant legacy mining constraints, whereas the NoW area focuses on six corridors migrating southwards with bulk non-selective mining methods. The fundamental difference in mine design, stope sequencing and selectively between CM and NoW/SoW is highlighted by the contrast in resource to reserve conversion, which is approximately 22% vs 70% to 80% respectively. In terms of the above, it should be recognised that the rebase plan has the following short-term targets:

  • Increasing the tonnes milled to 230kt/month by 2022
  • Ramping-up gold production to around 500,000 oz/year by 2022
  • Reducing AIC to around ZAR410,000/kg by 2022
  • Growth capital expenditure of approximately R2.3bn (US$151m) from 2017 to 2022

The SoW East area starts to contribute to gold production by approximately 2030 and SoW West by around 2034. As a result, the targeted technical and financial metrics for the mine will be fully embedded as the mining centre of gravity migrates to the NoW and subsequently SoW areas. In this respect, it should be understood that the full LoM plan entails an operational life of 78 years to 2095.

Assessment of South Deep’s production and cost performance during 2018 will be used to assist in profiling key metrics and modifying factors to be included in the next cycle of LoM planning and specifically the production ramp-up phase.

In 2016, Sibanye-Stillwater announced the partial closure of its Cooke 4 mine and submitted a final assessment report to the regulator in October 2017. South Deep is an interested and affected party in the process, as there may be a number of potentially adverse impacts on the mine, should pumping of mine water cease at Cooke 4 if Sibanye were to get the required approvals. South Deep, which is opposed to the cessation of pumping, is continuing to engage with Sibanye-Stillwater and other stakeholders to find an appropriate and effective solution and has appointed consulting engineers to develop alternative water treatment options.

Additional pertinent items to this year’s estimate highlighted are:

  • Enhanced mine definition drilling programme established to provide structural and stratigraphic definition for accurate short-term excavation design
  • All low-grade material in the life-of-mine design, inclusive of access development and ramping, is now included in the resource estimation as this material will by necessity be mined to access the mining horizon and contribute to the ore flow feeding the mill
  • Mine design criteria developed during the rebasing process are applied to all mining areas
  • Marginal adjustment made to selected mining dilution and recovery (losses) modifying factors extended for all of the NoW mining, pending sustained improvements, as recommended during the 2017 Reserve audit
  • Productivities and fleet equipment efficiencies adjusted more conservatively to align with current performances
  • Continuation of NoW capital infrastructure construction project: 4W crusher; 4W crusher conveyor infrastructure; 100 and 105 level development
  • The focus on the ‘Journey to operational excellence’ driving organisational transformation and operational improvement and building a high performance culture

Independent Geotechnical Review Board support continues in the following areas: to monitor and guide the transition to the new pillar layout; destress mining by high profile and larger yielding pillars; and the gradual movement to sequential mining as opposed to primary and secondary mining.