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  South Deep

South Deep

Backfill distribution plant  
During financial 2010 South Deep produced 264,800 ounces of gold at a cash cost of R197,669 per kilogram (US$811 per ounce) and an NCE of R399,211 per kilogram (US$1,638 per ounce).
During the year to end-June 2011 the outlook for South Deep is to produce between 321,500 and 353,700 ounces of gold at a cash cost of between R186,000 and R196,000 per kilogram and an NCE of between R360,000 and R385,000 per kilogram.
Backfill distribution plant    

The South Deep Project is situated some 45 kilometers south-west of Johannesburg, in the districts of Westonaria and Vanderbijlpark in the Gauteng province of South Africa. South Deep, which is a mine in development, was acquired by Gold Fields in December 2006. With some 78.2 million ounces of Mineral Resources (including Uncle Harry’s prospecting right area) and 29.3 million ounces of Mineral Reserves, South Deep is one of the greatest undeveloped ore bodies in the world.

South Deep is a long-life, developing deep-level gold mine operating at between 2,000 and 3,000 meters below surface. Located on the north-western rim of the Witwatersrand Basin, South Deep predominantly exploits auriferous palaeoplacer reefs or conglomerates that comprise the Upper Elsburg Reefs of the Mondeor Formation and, to a lesser degree, the Ventersdorp Contact Reef (VCR).

Gold produced
(’000oz)
 
Dump truck and supervision vehicle
Dump truck and supervision vehicle
 
Construction work performed at the metallurgical plant
Construction work performed at the metallurgical plant
Gold produced (’000oz)    

      F2010 F2009 F2008 F2007*
Main development Advanced km 10.1 7.2 5.9 2.9
Main on-reef development Advanced km 5.0 4.3 3.1 1.7
  Value cm g/t 4.8 5.9 6.0 6.2
Area mined**   ’000m2 0 0 42.0 48.0
Tonnes milled Underground ’000 1,485 1,038 1,066 776
  Surface ’000 196 203 301 328
  Total ’000 1,681 1,241 1,367 1,104
Yield Underground g/t 6.3 6.1 6.5 6.2
  Surface g/t 0.6 1.3 0.8 0.9
  Combined g/t 4.9 4.4 5.3 4.6
Gold produced Underground kg 8,127 5,178 6,967 4,783
  Surface kg 109 256 253 293
  Total kg 8,236 5,434 7,220 5,076
  Total ’000oz 265 175 232 163
Operating costs Underground R/t 1,119 1,134 1,170 896
  Surface R/t 62 53 54 75
  Total R/t 996 957 924 652
Gold sold   kg 8,236 5,434 7,220 5,166
Total cash cost   US$/oz 811 717 727 595
    R/kg 197,669 207,803 169,889 137,689
Notional cash expenditure   US$/oz 1,638 1,403 1,214 854
    R/kg 399,211 406,423 283,712 197,636
Net loss   Rm (81.0) (10.9) (143.1) (46.8)
Capital expenditure   Rm 1,613.3 1,020.5 784.7 283.4

* South Deep for seven months from 1 December 2006.
** VCR conventional mining was stopped in financial 2008.

The VCR will again be mined in future once mine design and mechanisation plans are complete. South Deep currently operates one gold plant but plans are under way to significantly expand the plant to accommodate the full production capacity of between 330,000 and 450,000 tonnes of ore per month.

Since acquiring this project in 2006, Gold Fields has invested in a major surface exploration drilling programme in Phase 2 and the adjacent Uncle Harry’s ground; conducted comprehensive and intensive remodelling of the ore body that has significantly improved grade and tonnage definition to facilitate improved mine design and scheduling; introduced a new capital development and construction plan underpinned by a rigorous capital expenditure system and framework; and suspended all conventional mining methods and converted the mine to a fully mechanised operation. It also introduced a basecase production build-up plan which will see the mine reach a full production run rate of between 750,000 ounces and 800,000 ounces per annum by the end of 2014. The capital development and construction programme supporting this target is progressing to plan and during financial 2010 very high levels of capital efficiency were achieved.

The NCE will remain high over the next two years because the mine is still in a capital development and construction phase. NCE will decline from 2013 onwards as the capital components of the project near completion and the production build-up progresses. The focus for South Deep over the next four years is to complete the shaft infrastructure of the twin shaft complex; the capital development below 95-level; the South Shaft refurbishment; the expansion of the processing facilities to support the combined targeted hoisting capacity of 450,000 tonnes per month; the new tailings management facility; and the opening up of the mechanised de-stress mining horizons to support increased production volumes.

The ore body is accessed from surface through two shaft systems, the new Twin Shaft complex and the original mine’s South Shaft complex which is currently being refurbished for full commissioning by mid-2014. The Twin Shaft complex comprises the completed and fully operational Main Shaft, as well as the Ventilation Shaft which is currently being deepened. The Main Shaft comprises a single drop to a depth of 2,995 meters. Deepening and equipping of the Ventilation Shaft commenced during financial 2010 to a similar depth as the Main Shaft. It will be completed by mid-2012, at which time the Twin Shaft complex will have a combined hoisting capacity of 330,000 tonnes of ore per month. During financial 2010 the South Shaft complex was partially refurbished and commissioned for limited hoisting of 60,000 tonnes per month. Upon completion of its refurbishment by mid-2012, the South Shaft complex will add an additional 120,000 tonnes of hoisting capacity to the mine, bringing the total combined hoisting capacity to 450,000 tonnes per month.

The mine has been subdivided into two main areas, namely “above current infrastructure” or “current mine” between 90 and 95-level at 2,656 meters below surface, from where most of the current production originates, and “below current infrastructure” to 110-level at 2,888 meters below surface. Most of the sub 110-level reserves will be mined between 2025 and 2050.