Integrated Annual Review 2012 Annual Financial Report 2012 Mineral Resources and Mineral Reserves Regional overview  
 

6.3.4 Yanfolila, Mali

Salient features
Overview
  • Located in south-western Mali
  • Multiple shallow pits
  • Low-risk project with straightforward technical requirements and supportive community
  • Unaffected by instability and military action in northern Mali

Mineral Resources
17 million tonnes containing:

  • 1.46 million oz gold (50% indicated, 50% inferred)

Development stage

  • Scoping

Scheduled start of production

  • 2016

Ownership

  • (Joint venture) Gold Fields 85%; government of Mali 10%; local vendor 5%

Material sustainability issues

  • Traditional small-scale artisanal mining activity on concession
  • Active conflict in the distant north of the country

Key stakeholders

  • Traditional artisanal and small-scale miners

Progress in 2012

Key points:

  • Doubling of Mineral Resource from 720,000 ounces to 1.4 million ounces
  • Updated scoping study
  • Positive business case for a smaller, two million tonne per year operation
  • Construction decision expected in 2013

Doubling of resource

During 2012, we focused on infilling previously defined anomalies and structures at the existing Gonka, Kosac, and Sanioumale West prospects – using reverse-circulation drilling. Preliminary resource modelling results have doubled the Mineral Resource to 1.4 million ounces – based on 17.4 million tonnes of ore at a grade of 2.6 g/t.

These results were used to update the scoping study for the project, which is now particularly comprehensive. The study recommends a less capital intensive, lower production rate of 2 million tonnes per year (with previous studies based on a 4 million tonne per year operation). Using this new model, the scoping study indicates potential production of 150,000 ounces a year over an eight-year life of mine, 2Mtpa processing rate and 95% gold recovery.

In addition, in the first quarter of 2013 we submitted a ‘Term de Reference’ (i.e. a project description for the Yanfolila Environmental and Social Impact Assessment (ESIA)) to the Malian authorities.

Outlook

Project acceleration

A de-risking programme is planned for the first half of 2013 which, if successful, would allow the project to be fast-tracked from its present scoping phase through feasibility to a development decision. The programme will include:

  • A 93,500 meter drilling programme
  • Completion of the ESIA
  • A gap analysis to identify – and address – design and engineering information weaknesses

We aim to reach a construction decision in 2013, with first gold production scheduled for 2016.

Supporting factors

This ‘fast-track’ approach (i.e. that does not apply the normal prefeasibility and feasibility assessments) is not normally applied. Nonetheless, there are a number of factors that support this approach at Yanfolila (in addition to the already very comprehensive nature of our scoping study), including:

  • Relatively low project capital requirements of approximately US$340 million
  • Relatively low levels of technical risk due to the existence of multiple shallow pits, straightforward recovery processes and limited infrastructure requirements
  • Community support for development and production

In addition, the Yanfolila Exploration Permit lapses in 2013 and under Malian law must be converted to an Exploitation Permit.

Licence to operate

Artisanal and small-scale mining

The Yanfolila project area hosts a significant amount of traditional alluvial artisanal gold mining (‘orpaillage’) – including community participants and foreign artisanal miners. Should the project continue to be developed, its potential impacts on this activity (and vice versa) – as well as its wider impacts on the local economy – will require careful management.

We initiated an EISA (including a Social Action Plan) in November 2012 that will assist in this respect, whilst also identifying the potential environmental implications of this artisanal activity. This is due for completion in mid-2013.

Conflict and security

A military coup in March 2012 resulted in the temporary interruption of exploration activity at Yanfolila – and the precautionary evacuation of our expatriate team. Drilling quickly resumed, however, when it became clear that the security situation within the surrounding southern region was stable. French military intervention against Islamist rebels in early 2013 means the risks posed to Bamako (and by extension our project logistics) remain limited.

We are monitoring the country closely to ensure ongoing conflict in the north does not pose a threat to our employees.

The Mineral Resources and Mineral Reserves Overview 2012, - Yanfolila, Mali

Technical Short Form Report 2012: Exploration and Growth Projects

Area near Yanfolila, Mali