Salares Norte
Salares Norte is a 100% Gold Fields-owned gold-silver deposit. It is located between 3,900m and 4,700m above sea level in the Diego de Almagro municipality in the Atacama region of northern Chile. Its high-sulphidation epithermal system contains mineralisation, offering high-grade oxides. The project is currently in its construction phase, and we expect it to meaningfully change Gold Fields' future profile by accelerating production growth and reducing Group AIC.
Land easement for the project was granted for 30 years on 30 May 2016. In December 2016, we obtained water rights to meet the project's operational requirements. The Atacama Environmental Assessment Commission approved Salares Norte's Environmental Impact Assessment (EIA) on 18 December 2019 and the Board approved the project's construction and-development in February 2020.
Although the construction team has made significant progress since activities began in 2020, Covid-19 and severe weather conditions affected progress on-site during 2021 and 2022. Indications are that first production will now commence only in Q4 2023. We forecast production of 15koz – 35koz in 2023, which will improve strongly to 500koz in 2024 and 600koz in 2025. Average annual production for 2024 – 2029 is expected at 500koz, with AISC of US$660/au-eq oz. Life-of-mine production between 2024 – 2033 is expected at 355koz/year, at average AISC of US$745/au-eq oz.
We now estimate total project capex of US$1,020m, of which US$758m had been spent by December 2022 (US$97m during 2020, US$375m during 2021 and US$286m during 2022). 2023 will be another capital-intensive year for the project, with US$230m budgeted for project capital. Despite the delay and the higher costs, Salares Norte remains a world-class project with a sector-leading cost profile.
At end-December 2022, the construction progress was 86% complete (end-December 2021: 55%) and total project progress stood at 87% (end-December 2021: 62%). Some key milestones were finalised during 2022, including the heavy mine equipment shop and the freshwater system. The processing plant construction was 77% complete at end-December 2022, including significant progress on the grinding, crusher and stockpile areas.
Pre-stripping of the Brecha Principal pit was completed in October 2022, and 50.6Mt of waste has been moved to date. Ore stockpiling commenced in Q4 2022, with 422kt (79koz of contained gold) built up by end-December 2022.
In addition to the Agua Amarga and Brecha Principal ore bodies, which will be mined over the initial 10-year period, there is significant exploration potential in the surrounding area. Salares Norte controls 84,000ha of mineral rights in the Salares Norte district and has carried out extensive exploration within a 20km radius of the plant site. The operation spent US$34m on exploration in 2022 and drilled a total of 18,836m. We will continue to invest in exploration in the area to add to the production pipeline from 2025 onwards.
An important part of the project's EIA approval was relocating the endangered Short-tailed Chinchilla from the area. The relocation programme commenced in August 2020 but was halted by the environmental regulator in November 2020 after two of the four relocated Chinchillas died soon after they had been moved. We have continued to collaborate with the authorities to resolve the sanction proceedings by providing a comprehensive plan to safely relocate the remaining estimated 20 Chinchillas.
As part of the plan, we prepared and updated the required administrative and technical improvements in the relocation strategy. We also continue to engage with authorities and other stakeholders – including independent environmental experts – while we wait for the regulator to respond to our compliance programme and, hopefully, lift the suspension.
This relocation delay does not affect the project's construction schedule but, if the restrictions are not lifted, we may be required to implement an alternative mining plan.
While there are no Indigenous claims or community presence on the concession or the dedicated access routes, Salares Norte embarked on an extensive engagement programme with four Indigenous communities in its wider vicinity and has entered into long-term agreements with them. The project's principal area of social influence – and potential labour-sending area – is the Diego de Almagro municipality, which is approximately 125km away.
