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REVIEW OF OPERATIONS: SOUTH AMERICA REGION

F2009 Achievements

  • Mine and plant steady at design level.
  • Excellent safety record.
  • Las Aquilas construction on-track.

Juan Luis Kruger
Executive Vice President: Head of South America Region

F2009 was indeed a signature year for Gold Fields in the South America Region. During the first half of the year the main driving force was the need to complete the commissioning and ramp-up of the Cerro Corona mine, which is owned by Gold Fields’ La Cima S.A., a subsidiary of Gold Fields in which the Group has an 80.7 per cent interest. The commissioning and production ramp-up went particularly smoothly, with the plant first achieving its nameplate throughput of 500,000 tons of ore per month, or 6.2 million tons per annum, by the end of December 2008, and steady state production at this level, on a consistent basis, by the end of the March quarter 2009.

This is a significant achievement when one considers that, prior to this project, Gold Fields had limited operating experience in South America, and that the Cerro Corona mine site is in a geographically challenging and remote location – between 4,000 and 5,000 metres above sea level, in the Andes mountains of Northern Peru. I am particularly proud of the team that displayed considerable skill, determination and perseverance, often against significant odds, to get this mine to full production in a relatively short period of time.

I am also pleased that not once during the construction phase, or since, has any member of the Cerro Corona team wavered on the very stringent safety procedures and protocols in place at the mine site, which is a trademark of the Gold Fields Group.

Cerro Corona has also established itself in a short space of time as a leader in the field of sustainable development in the region, with a number of innovative new projects at the mine site and in the surrounding communities. These projects include infrastructure and sustainable development initiatives aimed at improving the quality of life of the population in the areas of direct influence of the operation, which range from road construction, rural electrification, potable water, education and health care programmes, to training and employment opportunities for local workers, together with the development of self sustaining economic activities such as dairy cattle and a blueberry plantation. These projects have contributed to the development of the Hualgayoc region and have resulted in Cerro Corona being awarded with public recognition, strengthening the Gold Fields brand in Peru. Employee well-being is also a significant component of the sustainable development efforts, with programmes in place to address issues such as accommodation, sport and recreation, health care and the spiritual and social needs of employees.

A commitment to exemplary environmental management is a key aspect of the Gold Fields approach to sustainable development, and is a value that we fully embrace in the South America Region. At the Cerro Corona mine we have established an independent advisory committee consisting of external experts to advise us on all facets of the construction of the tailings management facility at the mine. Activities that are reviewed by this committee include the construction of the facility, the placement of tailings, as well as water quality and quantity issues.

Now that the Cerro Corona mine has reached steady state production, our focus has shifted to the optimisation of the site and the improvement of efficiencies, including cost management. We also believe that the processing plant has the potential to exceed its nameplate capacity and we will during F2010 be pursuing opportunities to increase throughput and production.

The Cerro Corona mine provides Gold Fields with a strong operational foothold in the South America Region. Gold Fields is targeting to have at least one million ounces in development or production in the region within four to five years. A very promising pipeline of growth opportunities exists in South America. The first opportunity is the possibility of growing the reserve base at the Cerro Corona mine by converting existing resources to reserves. This work is underway and, if successful, is expected to have a positive impact on both the production profile and the life of mine. A second opportunity is an exploration joint venture between Gold Fields La Cima S.A. and Compañía de Minas Buenaventura S.A.A. (Consolidada de Hualgayoc) on a significant land package, which includes a number of targets, surrounding the Cerro Corona mine site. Gold Fields has other greenfields exploration projects in the South America Region, including the Chucapaca Project in Southern Peru, which is a promising advanced stage exploration project which Gold Fields is pursuing through its fully owned exploration subsidiary, Minera Gold Fields Peru S.A. in partnership with Compañía de Minas Buenaventura. Furthermore, Gold Fields is also pursuing two growth opportunities in Central Chile, in the Maricunga belt, a highly endowed area of this country.

Juancho Kruger