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GOLD FIELDS LIMITED INTEGRATED ANNUAL REPORT 2021

South Deep: continued improvement

South Deep continued to show operational improvements in 2021 despite Covid-19 impacting production during Q1 2021 and leading to a downgrade in fullyear guidance for the mine in May. Encouragingly, productivity trends continued to improve across key leading indicators throughout 2021, and the mine managed to beat the revised production guidance, and even slightly exceed its original guidance.

The positive productivity trends can be attributed to several initiatives implemented following restructuring of the mine at the end of 2018. These are fully embedded into the operating model and include:

  • The Purposeful Visible Felt Leadership programme
  • Reinvigorating the leadership system
  • Improving face time and its effectiveness
  • Enabling logistics
  • Implementing innovation and technology

This has led to productivity and cost improvements driven by:

  • Restructuring of the mine in 2017/2018, which saw its workforce reduce by approximately a third, or 1,500 people
  • Moving production focus from the "current mine" to the more productive, newly laid-out area of the mine called North-of-Wrench. This new area now accounts for 70% of production compared with 30% in 2017
  • An established and stable leadership team

The Siyaphambili intervention – a management and leadership programme focusing on building the capability and capacity of our front-line supervisors and middle managers – also continued to bear fruit during 2021. As a result, we achieved the following key milestones during the year:

  • Total development metres increased by 44% to 10,282m in 2021 from 7,161m in 2020 as a result of improved efficiencies, mainly on the drill rigs (destress metres increased by 41%, while reef horizon development metres increased by 55%)
  • Longhole stoping volumes mined increased by 38% to 961,627 tonnes in 2021 (2020: 697,501 tonnes) due to improved stope availability, equipment productivity and stope extraction quality improvements. Encouragingly, stoping compliance to plan averaged 89% in 2021 in line with what was achieved in 2020
  • A total of 298,186m3 of backfill was placed in 2021 compared with 322,823m3 in 2020 as the backfill backlog was further eroded
  • The mine's overall productivity improved to 57 tonnes per employee costed (TEC) in 2021 from 48 tonnes per TEC in 2020. Drill rig productivity increased to 85m/rig in 2021 from 72m/rig in 2020

South Deep's gold production increased by 29% to 9,102kg (293koz) from 7,056kg (227koz) in 2020 while AIC declined by 1% in Rand terms to R655,826/kg (US$1,379/oz). Encouragingly, the mine generated net cash of R1.4bn (US$97m) in 2021 – 157% higher than the R558m (US$34m) generated in 2020.

For 2022, we expect another healthy increase in production (+7%) to 9,600kg – 9,700kg (310koz) although costs are forecast to rise to approximately R755,000/kg (US$1,510/oz) amid higher capex, including R555m on the solar plant, (2020 spend was R60m), and cost inflation. We expect production to grow by a further 20% – 30% to 345koz – 375koz over the next three to four years, with growth more or less linear year by year.

South Deep mine, South Africa