South Deep gold mine - Mineral Resource and Mineral Reserve

The Mineral Resource and Mineral Reserve were updated as of December 2017 and used a gold price of US$1,400/oz (ZAR600,000/kg) and US$1,200/oz (ZAR525,000/kg) respectively. The December 2017 Mineral Resource has been stated inclusive of Mineral Reserve. Geological and resource evaluation models have been updated to reflect the latest available data sets. All Mineral Resources and Mineral Reserves are classified as being above infrastructure, in line with international practice where Reserves are accessed via ongoing ramps, which are incorporated in the LoM.

Mineral Resource

As at 31 December 2017, the total Mineral Resource estimate at the South Deep gold mine is as follows:

Mineral Resource classification

  Tonnes (kt)     Grade (g/t)     Gold (koz)  
  Dec Dec Dec     Dec Dec Dec     Dec Dec Dec  
Classification 2017 2016 2015     2017 2016 2015     2017 2016 2015  
Underground                            
Measured 35,774 41,212 47,476     6.65 6.39 7.66     7,653 8,464 11,688  
Indicated 259,821 203,105 190,191     6.07 7.10 7.91     50,725 46,335 48,339  
Inferred 29,167 31,549 31,550     8.02 7.62 7.86     7,520 7,728 7,974  
Total underground 324,762 275,866 269,217     6.31 7.05 7.86     65,898 62,527 68,001  
Surface stockpiles                            
TSF (Measured) 56,808 64,139 62,639     0.23 0.22 0.22     421 444 435  
Surface stockpiles                            
Total surface                            
stockpiles 56,808 64,139 62,639     0.23 0.22 0.22     421 444 435  
Grand total 381,570 340,005 331,856     5.41 5.76 6.41     66,318 62,971 68,436  

Mineral Resource classification per mining area (excluding stockpiles)

  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)
 
Underground                                      
Current Mine 27,984 6.04 5,436     13,861 5.43 2,420         41,845 5.84 7,856  
NoW 6,798 7.81 1,707     53,403 6.66 11,437         60,201 6.79 13,143  
SoW-E     66,211 5.95 12,673     2,266 5.13 374     68,477 5.93 13,047  
SoW-W     120,234 5.75 22,231     10,071 6.99 2,263     130,304 5.85 24,494  
VCR 992 15.98 510     6,112 10.00 1,965     16,831 9.02 4,883     23,935 9.56 7,358  
Total underground 35,774 6.65 7,653     259,821 6.07 50,725     29,167 8.02 7,520     324,762 6.31 65,898  

The average grade of the resource model above cut-off and the corresponding estimated tonnage (GTCs), depend on block size (the larger the block size the lower the level of selectivity). The historical resource models incorporated the option of higher mining selectivity in certain reef horizons within the ore body. In this regard, a minimum vertical block width of one meter was previously included in the resource modelling and reporting.

Changes to the Mineral Resource year-on-year are partly due to the new reporting strategy now aligned with the current mining methodology, which has evolved over time. The protocol involves reporting the Resource on a minimum mining width with a generic minimum resource block dimension of 5m x 5m x 5m, which is reflective of the new excavation types and mining methods employed in the rebase plan. It provides a practical block model geometry and GTCs better aligned to the current mining method

The Resources for CM, NoW and SoW now all accommodate the latest mine design shapes (now inclusive of the in-design material) and include the additional tonnes at a lower average grade that will be sourced from these areas

Modifying factors

  • Unless otherwise stated, all Mineral Resources are quoted as 100% and are not attributable with respect to ownership
  • The Measured and Indicated Mineral Resources are inclusive of Mineral Reserves
  • Regional pillars are excluded from the Mineral Resource
  • The Mineral Reserve statement includes only Measured and Indicated Mineral Resources, modified to produce Mineral Reserves and 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
  • All Mineral Reserves are quoted in terms of run-of-mine (RoM) grades and tonnage as delivered to the metallurgical processing facilities inclusive of in-section waste tonnes, but exclusive of capital development waste material
  • All reserved excavation designs are generated in full three-dimensional virtual space
  • Modifying factors are applied to the design to account for dilution and mining losses
  Units   Dec 2017   Dec 2016 Dec 2015  
Mineral Resource parameters              
Mineral Resource gold price US$/oz   1,400   1,400 1,500  
  ZAR/kg   600,000   650,000 550,000  
Cut-off grade g/t   3.4 – 3.8   3.2 – 3.6 3.2 – 3.6  
Mineral Reserve parameters              
Mineral Reserve gold price US$/oz   1,200   1,200 1,300  
  ZAR/kg   525,000   550,000 500,000  
Cut-off grade (NoW – SoW) g/t   3.9 – 4.2   3.8 – 4.2 3.8 – 4.2  
MCF %   100   100 100  
Dilution underground %   8.8   7.9 7.3  
Losses underground %   8   5.5 3.9  
Plant recovery factor %   96.5   96.5 96.5  
Processing capacity Mtpa   4.0   4.0 4.0  

Grade tonnage curve

  Grade tonnage curve – Underground
  Grade tonnage curve – Underground
  Note: Reserve material profiled as ‘in-design’ material added to the resource footprint has not been accounted for by the MSO generated stopes and is consequently excluded in the grade tonnage curve.
Mineral Reserve

The 2017 Mineral Reserve estimate is based on the life-of-mine (LoM) plan and classified according to the SAMREC Code and subdivided into Proved and Probable Reserve.

The LoM design and scheduling work is undertaken 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, interdependent mining activities and other techno-economic investigations. Capital requirements are accommodated in the cash-flow model to ensure sustainable operations over the LoM. The BBBEE transaction, concluded in December 2010, grants an empowerment consortium ~10% of South Deep’s total Reserves. Based on the relevant sliding scale of the vesting of the economic benefit attached to the 10% and the current LoM profile, the Mineral Reserve portion currently attributable to Gold Fields is 91%.

Mineral Reserve classification

  Tonnes (kt)     Grade (g/t)     Gold (koz)  
  Dec 2017 Dec 2016 Dec 2015   Dec 2017 Dec 2016 Dec 2015     Dec 2017 Dec 2016 Dec 2015  
Underground                      
Proved 13,974 15,099 11,822   5.82 5.59 5.92     2,617 2,716 2,252  
Probable 202,787 202,499 207,014   5.33 5.32 5.26     34,771 34,609 35,005  
Grand total 216,761 217,598 218,835   5.36 5.34 5.30     37,388 37,324 37,257  

Mineral Reserve classification per mining area

  Proved     Probable     Total Mineral Reserve  
  Area Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
    Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
    Tonnes
(kt)
Grade
(g/t)
Gold
(koz)
 
Underground                            
Current Mine 7,313 5.54 1,302     3,078 4.20 416     10,391 5.14 1,718  
NoW 6,661 6.14 1,315     39,248 6.09 7,679     45,909 6.09 8,994  
SoW – E     51,707 5.42 9,003     51,707 5.42 9,003  
SoW – W           107,435 5.02 17,324     107,435 5.02 17,324  
VCR     1,319 8.24 350     1,319 8.25 350  
Total underground 13,974 5.82 2,617     202,787 5.33 34,771     216,761 5.36 37,388  

Mineral Reserves at South Deep are reported at mill head grade inclusive of ore and in-section (in-design) development tonnes, which cannot be separated in the ore flow. The capital waste is excluded due to future separation potential in the ore flow NoW. If included in the ore flow for the LoM, the impact on the Reserve grade would be – 0.2 g/t with the related volume increase

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

Production depletion (269koz)

 

Production depletion (269koz)

Geological modelling updates in CM (+258koz) and NoW (+636koz), due to additional borehole and mapping data. Sub-crop extension to the west based on new data

 

Resource model: Year-on-year resource model updates based on drilling, sampling and mapping

Lower gold price, resulting in an increase in cut-off grade   Inclusion of remnant stopes (Project Viking) in the plan, adding 102koz to the reserve
Alignment of the SoW reporting strategy to CM and NoW by reporting the resource on a minimum mining width and geometry dimension of 5m x 5m x 5m  

Updated modifying factors (dilution and losses), aligned to current performance for CM and NoW

Reserve material (LoM in-design/in-section), such as access development and ramping, are now also included in the resource estimation    

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

Waterfall charts represent underground material only.

   
Mineral Reserve sensitivity (Gold - Moz)    
 
Mineral Reserve sensitivity

The Mineral Reserve sensitivity was derived from the application of the relevant cut-off grades to individual grade tonnage curves.

The Mineral Reserve sensitivities are not based on detailed depletion schedules and should be considered on a relative and indicative basis only. The graph on the left indicates the managed Mineral Reserve sensitivity at -15%,-10%, -5%, base (ZAR525,000/kg), +5%, +10% and +15% to the gold price.