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

6.2.2 Greenfields exploration

Our greenfields exploration team is one of the best in the industry – as a result of our long-term policy of investing in our in-house expertise and capabilities. In 2012, the team continued to perform strongly drilling 236,752 meters (2011: 227,344 meters), at an all-in direct drilling cost of US$408/meter (2011: US$350/meter).

Our greenfields exploration efforts are focused on developing new projects in:

  • Our established Australasia, South America and West Africa regions, where we can leverage our existing knowledge, relationships, resources and infrastructure
  • A small number of new, underexplored ‘frontier’ areas in prospective geological belts where we can establish ourselves as dominant players

At the end of 2012, our greenfields exploration portfolio (excluding our four major resource development projects, (p112 – 119)) consisted of:

  • 10 Initial drilling projects
  • Three advanced drilling projects

In 2013, we expect to focus on a smaller number of the most prospective and commercially attractive greenfields prospects. This reflects a relative reduction of 38% in our greenfields exploration budget (as against 2012 actual) – and the refocusing of Group strategy on immediate cash generation.

Initial drilling

We currently have 10 initial drilling projects (i.e. projects where a target has been successfully defined and drilling has commenced) in eight countries, ranging from Argentina to the Philippines. A full list of these projects can be found online.

Mineral Resources and Mineral Reserves Overview 2012 - Initial drilling projects

Figure 6.2: Greenfields project pipeline

Greenfields project pipeline

Advanced drilling

Our advanced drilling projects (i.e. projects where a discovery has been made and the target has the requisite size potential to develop a resource of material interest to Gold Fields) include the following:

Mineral Resources and Mineral Reserves Overview 2012 - Advanced drilling projects

Canada: Woodjam project (51% attributable)

In early 2012, we announced a maiden Mineral Resource for the copper-rich South East Zone porphyry at Woodjam South in British Columbia. Since then, we have completed additional diamond drilling on the South-East Zone as well as four other porphyry copper-gold mineralised centres. Mineral Resource estimates are in progress and we expect to make a decision as to the future development of the project in the first half of 2013.

The local Horsefly community maintains a positive view of the project, whilst engagement with local First Nation groups has likewise indicated that development of the project would be welcomed. In addition, all relevant environmental permitting is in place.

Chile: Salares Norte project (100%)

Based on encouraging results from an earlier drilling programme, we have moved our Salares Norte project to advanced drilling status. We also started a new drilling programme in late 2012, with the aim of completing a maiden Mineral Resource estimate and a scoping study by the end of 2013. Initial assay results have been encouraging.

The area is largely uninhabited – although there is limited potential for the presence of indigenous Colla ancestral lands within the project area. We are monitoring the implications of this – as well as Chile’s recent ratification of ILO Convention 169 (which relates to indigenous people's rights).1

Given local water scarcity, we are implementing a short-term strategy to minimise water use during drilling – and are seeking to implement valuable lessons learnt at Cerro Corona and Chucapaca in Peru as we seek to manage our impact on local people. In addition, we are studying potential energy supply solutions, given the remote nature of the site and the lack of a nearby, reliable local power source.

In this context, we are currently implementing three key strategies at Salares Norte to assess:

  • The long-term availability of ground water for any future mining operation and the environmental impact of our exploration activities
  • Potential community and social issues
  • Prospects for securing land access from the current owners (the National Chilean State) in the context of evolving indigenous rights and potential declaration of a nearby area as a protected area

Kyrgyzstan: Talas project (100%)

During the third quarter of 2012, we purchased the remaining 40% interest in the Talas project in Kyrgyzstan from Orsu Metals Inc. We took this opportunity to consolidate our ownership of the project at a time when the political situation in the country showed strong signs of stabilisation and improvement. The project’s Mineral Resources, at the end of December 2012 totalled 6.7 million gold ounces and 1,666 Mlb copper ounces.

We recommenced our diamond drilling programme in April 2012, following our withdrawal from the country in April 2010, amid political unrest. The latest drilling programme produced positive results, confirming high gold-copper grades associated with the central sheeted vein zone that cuts through the Taldybulak porphyry. Our drilling programme is still in progress – and we plan to update our Mineral Resource estimate and scoping study in the first half of 2013. This will inform our decision as to the future development of the project.

We are proactively managing certain community challenges in the area, including a history of disputes over land ownership amongst the local Aral community, a history of distrust of government and other institutions, and excessive stakeholder expectations. This includes sensitive and consistent stakeholder engagement – as well as the implementation of ‘shared value’ community development initiatives.

Community engagement takes place both directly and through the Aral Local Commission. There are no significant grievances and our social licence to operate remains strong.

We are in the process of implementing a comprehensive risk assessment review for the Talas project, with input from external experts. This is focused on environmental risks and permitting, security and socio-economic threats, land access and socio-political risks.