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Arrow F2009 Financial Highlights
Arrow Message from the Chairman
Arrow Board of Directors
Arrow Executive Committee
Arrow Message from the Chief Executive Officer
Arrow Gold Fields at a Glance
Arrow South Africa Region
   Arrow Driefontein Gold Mine
   Arrow Kloof Gold Mine
   Arrow Beatrix Gold Mine
   Arrow South Deep Project
Arrow West Africa Region
  Arrow Tarkwa Gold Mine
  Arrow Damang Gold Mine
Arrow Australasia Region
  Arrow St Ives Gold Mine
  Arrow Agnew Gold Mine
Arrow South America Region
  Arrow Cerro Corona Gold Mine
Arrow Exploration and Business Development
Arrow Mineral Resources and Reserves
   
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REVIEW OF OPERATIONS: AUSTRALASIA REGION

St Ives Gold Mine

Fatality-free year, and Serious Injury Frequency Rate improves by 32 per cent.
Brought the Belleisle and Cave Rocks underground mines into full production.
Completed conceptual study for Athena, accelerated development plan started.

OVERVIEW

Location: The St Ives operations extend from 5 to 25 km south-southwest of the town of Kambalda in Western Australia, approximately 630 km east of Perth. Located at approximately latitude 31°12’S and longitude 121°40’E, the nearest major settlement is the town of Kalgoorlie situated 80 km north. Infrastructure: Ore is currently mined from three underground mines, three open pits and 10 surface stockpile sources, and processed via both mill/CIP and heap leach plants. Geology: Structurally controlled hydrothermal gold deposits situated in the Norseman-Wiluna Greenstone Belt, which is part of the Yilgarn Craton, a 2.6Ga granite-greenstone terrain in Western Australia. Employees in service: The mine has 263 permanent employees and 658 contractors.

SAFETY AND ENVIRONMENT

St Ives remained fatality free for F2009; but unfortunately recorded two serious injuries during the year and the lost day injury frequency rate decreased from 0.43 in F2008 to zero this year. The primary focus is to eliminate injuries through critical hazard controls together with the continued implementation of an intervention designed to influence safety performance.

The mine maintained AS4801:2000 Occupational Health and Safety Management System certification and ISO14001:2004 (Environmental Management System) certification. Post year end the mine was awarded full ICMI Cyanide Code compliance.

OPERATIONAL REVIEW

Gold produced increased by two per cent from 418,000 ounces in F2008 to 428,000 ounces in F2009. This was due to the Belleisle and Cave Rocks underground mines achieving full production in September and December 2008 respectively, as well as the Leviathan pit cutback which achieved full production in January 2009.

Tons milled at Lefroy increased from 4.65 million in F2008 to 4.82 million in F2009. The Lefroy mill operation benefited from various value adding projects, which included the optimisation of the blending strategy and improved tailing deposition. Heap leach feed decreased from 2.59 million tons to 2.44 million tons.

Tons mined decreased from 35.8 million to 31.8 million and ore mined increased from 6.04 million tons in F2008 to 7.02 million tons in F2009. The majority of the increase was due to an increase in ore from the newly commissioned Cave Rocks and Belleisle underground mines, and production from Leviathan open pit.

Revenue increased from A$381 million in F2008 to A$512 million in F2009, resulting from the higher gold price received and increased production.

Operating costs, including gold-in-process movements, increased by 24 per cent from A$277 million in F2008 to A$344 million in F2009. This increase was mainly due to the impact of the full Morgan Stanley Royalty for the year, at A$46 million, together with increases in input cost, principally labour and external services, partially offset by lower fuel costs.

Total cash cost increased from A$649 per ounce in F2008 to A$805 per ounce in F2009 as a result of the higher operation costs.

Operating profit, before amortisation, increased from A$105 million in F2008 to A$168 million in F2009. Operating margin increased from 27 per cent in F2008 to 33 per cent in F2009.

Capital expenditure decreased from A$120 million in F2008 to A$93 million in F2009. The majority of this expenditure was on development for the underground operations at Argo and Cave Rocks, and continuing exploration expenditure, mainly on the Athena project complex.

Notional cash expenditure increased from A$932 per ounce in F2008 to A$1,023 per ounce in F2009.

F2010 Focus Areas

  • Maintaining OSHAS18001 Occupational Safety and Health Management and ISO14001:2004 (Environmental Management Systems);
  • Completing the Athena underground mine feasibility study and commence development;
  • Increasing the St Ives Mineral Reserves to six years and resources to 12 years;
  • Continuing to implement efficiencies and cost reductions; and
  • Managing dilution and recoveries.

Lost Day Injury Frequency Rate
per million man hours worked

Lost Day Injury Frequency Rate -  per million man hours worked

 

Australia consolidated

          2009   2008   2007  
  Net earnings   A$m   94.3   41.2   52.8  

St Ives Gold Mine

          2009   2008   2007  
  Open pit mining                  
  Waste mined   '000t   24,801   29,778   26,828  
  Ore mined   '000t   5,799   5,143   3,928  
  Head grade   g/t   1.52   1.71   2.23  
  Strip ratio   W:O   4.31   5.79   6.83  
  Underground mining                  
  Ore mined   '000t   1,222   901   1,336  
  Head grade   g/t   5.06   5.15   5.28  
  Processing                  
  Tons processed Milled '000t   4,821   4,647   4,669  
    Heap leach '000t   2,441   2,586   2,090  
    Total '000t   7,262   7,233   6,759  
  Yield Milled g/t   2.5   2.5   3.0  
    Heap leach g/t   0.5   0.6   0.5  
    Total g/t   1.8   1.8   2.2  
  Gold produced   kg   13,322   12,992   15,146  
      '000oz   428   418   487  
  Total cash costs   A$/oz   805   649   540  
      US$/oz   596   582   424  
  Notional cash expenditure   A$/oz   1,023   932   738  
      US$/oz   757   836   579  
  Capital expenditure   A$m   92.9   120.3   96.6