Integrated
Annual Report
2018
2018
Currently viewing: Life extension through near-mine exploration / Next: Mineral Resources and Reserves summary
Near-mine exploration plays a key role in Gold Fields' strategy as we believe it offers one of the lowest-cost opportunities for growing cash-flow, particularly on a per share basis. The value in near-mine exploration lies in:
In addition to adding to Gold Fields' Mineral Resource and Mineral Reserve base, near-mine exploration:
In 2018, Gold Fields spent US$80m on near-mine exploration (2017: US$87m), which supported a total of 507,497 metres of near-mine drilling (2017: 754,669 metres). The majority of this spending - US$63m (A$85m) (2017: US$75m (A$99m)) - was incurred at our Australian mines. US$14m was spent in Ghana, which is slightly higher than the US$11m spent in the region in 2017, amid a renewed focus on extending the life of the Tarkwa mine.
For 2019, Gold Fields has budgeted US$63m for near-mine exploration of which US$57m (A$76m) will be at our Australian operations.
Following is a breakdown of brownfields exploration at our operations during 2018:
At St Ives, total exploration spend in 2018 was A$36m (US$27m). A total of 124,355 metres were drilled during the year, resulting in a 2% increase in Mineral Resources to 3.9Moz. Taking into account depletion of 367koz during 2018, Mineral Reserves at St Ives increased 11% from 1.57Moz to 1.74Moz.
In June 2018, Gold Fields entered into a farm-in joint venture agreement with Lefroy Exploration. The prospective tenements being farmed into comprise 372km2 of the Lefroy Gold project adjacent to our St Ives mine. Gold Fields can earn up to a 70% interest in the tenements by spending up to A$25m (US$19m) on exploration activities over a six-year period, and will manage all exploration activities during this time. During 2018, Gold Fields spent A$36m (US$26m) on exploration activities on the tenements (including Lefroy Gold).
A$23m (US$17m) was spent on exploration at Agnew during 2018 and a total of 122,082 metres were drilled during the year. Encouragingly, Agnew replaced Reserves after depletion again during 2018. Mineral Reserves increased 4% to 0.56Moz while Mineral Resources increased 5% to 2.05Moz.
The exploration effort of the past few years is starting to show success, with Waroonga North growing laterally and at depth. Redeemer North is building up to a 0.5Moz – 1.0Moz deposit, whilst we are seeing further extensions of Genesis and Sheba at New Holland.
Total exploration spend at Granny Smith was A$23m (US$17m) in 2018. A total of 165,456 metres were drilled during the year, which resulted in a 43koz (2%) increase in Mineral Reserves and a 762koz (11%) increase in Mineral Resources at the Wallaby Underground mine.
Exploration has generated additional advanced targets in-mine and regionally, which will be targeted as additional sources of mill feed in the near future.
As at 31 December 2018, Granny Smith’s Mineral Resources and Mineral Reserves were 7.84Moz and 2.25Moz, respectively. Gold Fields has grown the Granny Smith Resource by 4.5Moz and the Reserve by over 2.5Moz since acquiring the asset in 2013. The immediate focus is on converting Mineral Resources to Reserves.
With the transition to contractor mining in early 2018, the Tarkwa mine has devoted more time and resources on life-of-mine extension exploration activities. Gold Fields spent US$9m in near-mine exploration at Tarkwa during the year, drilling 48,429 metres. Tarkwa’s Mineral Reserves decreased by 128koz (2%), but Mineral Resources increased by 1.3Moz (15%).
As at 31 December 2018, Tarkwa’s Mineral Resources and Mineral Reserves were 9.9Moz and 5.8Moz, respectively.
While the focus at Damang was on implementing the reinvestment plan, Gold Fields also spent US$5.4m on near-mine exploration during 2018. A total of 33,857 metres were drilled. Despite the exploration effort, Mineral Resources and Mineral Reserves decreased marginally to 6.0Moz (-1%) and 1.6Moz (-6%), respectively.