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

3.2 Operation: Cerro Corona


Cerro Corona is located in the highest part of the western Cordillera of the Andes in northern Peru. It produces gold and copper concentrate from a large open pit, and processes ore through a standard sulphide floatation tank. The copper-gold concentrate is trucked to the port of Salaverry for export.

Strategic overview

In 2013, the mine could achieve its full five-year payback of all initial capital expenditure on its development and construction depending on gold and copper prices. Given it has an 18-year life of mine remaining, 3.7 million ounces of Mineral Resources and enjoys the highest NCE margin in the Group, Cerro Corona should continue to play a key role in supporting Gold Fields cash generation strategy well into the future.

The Las Tomas reservoir at Cerro Corona, Peru
The Las Tomas reservoir at Cerro Corona, Peru

Performance overview

Managed gold equivalent production fell by 11% from 383,100 ounces to 342,100 ounces. This was due to anticipated lower gold and copper grades, a lower copper to gold price ratio (dictated by changes in market prices for the respective metals) and a lower milling rate in the third quarter due to the processing of hard ore.

Nonetheless, the overall mining fundamentals of the operation remain strong, with technical parameters including volume, grade and recovery expected to track disclosures in our Mineral Resources and Reserve declaration.

Lower gold equivalent production, higher ore and waste mining volumes, and expenditure on plant contributed to a higher total cash cost of US$492 per ounce – compared with US$437 per ounce in 2011. Meanwhile, the mine’s NCE margin fell to 52% (2011: 60%) – partly reflecting lower net metal prices received and higher capital expenditure of US$94 million. Much of this related to construction activity on our tailings facility throughout the year (including an additional raise), as well as the implementation of optimisation projects at the processing plant designed to debottleneck the facility. Despite this, the mine continues to boast the highest NCE margin in the Group.

Cerro Corona has recorded no Lost Time Injuries since September 2011.

Near-mine exploration

During 2012, we have been assessing the potential offered by the extension of mineralisation of a gold-copper porphyry system that runs to significant depths beneath the current reserve pit (known as Corona Deep). It shares similar characteristics to a number of ‘pencil’ gold-copper porphyry systems that can extend to depths far below those currently tested at Cerro Corona. As a result, we have been carrying out drilling to establish the potential for an ore body capable of supporting a large-scale underground mining operation.

2013 outlook

Planned production at Cerro Corona is estimated at between 270,000 and 280,000 gold equivalent ounces at a total cash cost of US$600/oz and an NCE of US$920/oz. This plan assumes:

  • A gold price of US$1,700/oz and a copper price of US$8,000/t

We are examining two potential opportunities to add further production at Cerro Corona, including:

  • Expansion of the existing processing plant to bring forward sulphidebased production
  • A new heap leach facility to process more than 300,000 ounces of gold contained in the mine’s surface oxide stockpiles

The Las Tomas reservoir at Cerro Corona, Peru

Key indicators

Figure 3.8: Optimising our operations indicators – Cerro Corona

Category 2012   2011   2010   2009   2008  
Gold-equivalent produced – attributable (‘000oz) 337   356   328   268   60  
Total cash cost (US$/oz) 492   437   363   361   380  
Notional Cash Expenditure (NCE) (US$/oz) 775   592   532   626   1,560  
Gold price (US$/oz) 1,588   1,463   1,201   970   658  
Operating profit (US$m) 396   403   341   206   19  
Operating costs (US$m) 171   157   146   122   32  
Operating margin (%) 71   72   71   62   43  
NCE margin (%) 52   60   56   35   (137)  
Fatal Injury Frequency Rate (FIFR) 0   0   0   0   0  
Lost Time Injury Frequency Rate (LTIFR) 0.00   0.18   0.00   0.32   0.21  
Energy consumption (TJ) 1,122   1,006   895   425   n/a  
CO2 emissions (’000 tonnes) (Scope 1 & 2) 80.2   70.8   49.4   22.8   n/a  
Water withdrawal (million liters) 3,297   3,582   574   187   n/a  

Figure 3.9: Growing Gold Fields indicators – Cerro Corona

Category 2012   % of Group total  
Attributable Gold Mineral Resources (million oz) 3.65   2  
Attributable Gold Mineral Reserves (million oz) 2.74   4  

Figure 3.10: Securing our future indicators – Cerro Corona

Category 2012   2011   2010   2009   2008  
Total employees 373   367   350   337   n/a  
Employee wages and benefits (US$) 46   49   33   22   9  
Total taxation and royalties paid (US$m) 139   126   73   46   1  
SED spend (US$m) 5   4   n/a   n/a   n/a