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:
This has led to productivity and cost improvements driven by:
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:
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.