Gold Fields

Review of Operations

Six months ended 30 June 2021 compared with six months ended 30 June 2020

Figures may not add as they are rounded independently.

South Africa region

South Deep

June
2021
  June
2020
  %
Variance
 
Ore mined 000
tonnes
  745.2   490.4   52%  
Waste mined 000
tonnes
  87.3   16.0   446%  
Total tonnes 000
tonnes
  832.5   506.4   64%  
Grade mined – underground reef g/t   5.94   6.26   (5)%  
Grade mined – underground total g/t   5.32   6.07   (12)%  
Gold mined kg   4,426   3,072   44%  
  000'oz   142.3   98.8   44%
Destress m2   23,172   14,958   55%  
Development m   2,418   1,541   57%  
Secondary support m   6,382   3,605   77%  
Backfill m3   120.8   141.0   (14)%  
Tonnes milled – underground reef 000
tonnes
  751   501   50%  
Tonnes milled – underground waste 000
tonnes
  56   12   367%  
Tonnes milled – surface 000
tonnes
  665   441   51%  
Total tonnes milled 000
tonnes
  1,472   954   54%  
Yield – underground reef g/t   5.20   6.14   (15)%  
Surface yield g/t   0.10   0.10   –%  
Total yield g/t   2.70   3.27   (17)%  
Gold produced kg   3,970   3,123   27%  
  000'oz   127.6   100.4   27%
Gold sold kg   3,868   3,042   27%  
  000'oz   124.4   97.8   27%
AISC R/kg   639,288   650,972   (2)%  
  US$/oz   1,368   1,227   11%
AIC R/kg   674,965   654,537   3%  
  US$/oz   1,444   1,234   17%
Sustaining capital expenditure Rm   290.1   230.7   26%  
  US$m   20.0   14.0   43%
Non-sustaining capital expenditure Rm   138.0   10.8   1,178%  
  US$m   9.5   0.7   1,257%
Total capital expenditure Rm   428.1   241.5   77%  
  US$m   29.5   14.7   101%
Net cash flow Rm   406.9   79.3   413%  
  US$m   28.0   4.8   483%  

South Deep H1 2021 performance showed a significant improvement in most measures compared to H1 2020. This is due to a less severe operational impact from COVID-19 related delays, the operation has learned from previous COVID-19 waves and implemented protocols to manage and mitigate the impact. During H1 2020, the mine was placed on care and maintenance during a full COVID-19 lockdown and operated well below its full labour complement for the remainder of H1 2020 in compliance with the government-imposed restrictions. This was partially offset by 10 additional production days due to the change in the calendar in H1 2020. Ore mined increased by 52% to 745,200t for the six months ended 30 June 2021 from 490,400t for the six months ended 30 June 2020. Gold produced increased by 27% to 3,970kg (127,600oz) for the six months ended 30 June 2021 from 3,123kg (100.400oz) for the six months ended 30 June 2020.

Development increased by 57% to 2,418 metres for the six months ended 30 June 2021 from 1,541 metres for the six months ended 30 June 2020. Destress increased by 55% to 23,172m? for the six months ended 30 June 2021 from 14,958m? for the six months ended 30 June 2020 in line with increased output while continuing with migration of mining activities from current mine to North of Wrench. Waste mined increased by 446% to 87,300t for the six months ended 30 June 2021 from 16,000t for the six months ended 30 June 2020 as capital infrastructure development and Cut-5 access development in North of Wrench mining area increased.

Secondary support increased by 77% to 6,382 metres for the six months ended 30 June 2021 from 3,605 metres for the six months ended 30 June 2020 as these activities were reinstated later than production post the 2020 COVID-19 hard lockdown. Backfill decreased by 14% during the six months ended 30 June 2021 compared to the same period in 2020 as H1 2020 included backlog backfill which was reduced significantly.

Surface re-mining and processing increased by 51% as a result of fully utilising the separate processing circuit to maximise value from this operation and supplying sufficient underground backfill quantities, this increase led to a 17% reduction in total yield compared to H1 2020. Underground reef yield decreased by 15% to 5.20g/t for the six months ended 30 June 2021 from 6.14g/t for the six months ended 30 June 2020 due to a decrease in stoping grade, which dropped by 12% combined with an increase in lower grade destress tonnes. Increase in destress volume outputs is also as a result of a change in design which saw an increase in excavation size for destress.

Total all-in cost increased by 3% to R674,965/kg (US$1,444/oz) for the six months ended 30 June 2021 from R654,537/kg (US$1,234/oz) for the six months ended 30 June 2020 mainly due to higher cost of sales before amortisation and depreciation and higher capital expenditure, partially offset by higher gold sold. Translating the largely ZAR based costs into US$ was impacted by a 12% strengthening of the ZAR: US$ in the comparative period.

Capital expenditure increased by 77% to R428.1m (US$29.5m) for the six months ended 30 June 2021 from R241.5m (US$14.7m) for the six months ended 30 June 2020 as explained below.

Sustaining capital expenditure increased by 26% to R290.1m (US$20.0m) for the six months ended 30 June 2021 from R230.7m (US$14.0m) for the six months ended 30 June 2020 mainly due to the winder drum replacement, shaft entrance and plant wall construction, Doornpoort Phase 2 construction and South Shaft infrastructure repairs. Non-sustaining capital expenditure increased by 1178% to R138.0m (US$9.5m) for the six months ended 30 June 2021 from R10.8m (US$0.7m) for the six months ended 30 June 2020. This increase was mainly due to 100L and 105L development and associated infrastructure (105L conveyors and 100L 4 West main crusher).

South Deep generated net cash inflow of R406.9m (US$28.0m) for the six months ended 30 June 2021 compared with an inflow of R79.3m (US$4.8m) for the six months ended 30 June 2020. The increase is mainly due to higher gold sold, partially offset by higher cost of sales before amortisation and depreciation as well as higher capital expenditure.

Guidance

The revised cost and production guidance published on 6 May 2021 is still intact and remains as follows:

  • Gold produced 8,700kg (280,000oz);
  • All-in sustaining costs ~ R672,000/kg (US$1,410/oz); and
  • Total all-in cost ~ R712,000/kg (US$1,495/oz).

West Africa region

Ghana

June
2021
  June
2020
  %
Variance
 
Gold production 000'oz   440.1   420.4   5%  
AISC US$/oz   1,081   1,060   2%  
AIC US$/oz   1,114   1,093   2%  
Net cash flow US$m   181.9   139.2   31%  

Total production increased by 5% to 440koz for the six months ended 30 June 2021 from 420koz for the six months ended 30 June 2020 mainly due to increased production at Damang as mining progressed into the main ore body at the Damang Pit Cutback (DPCB) during H2 2020.

All-in cost increased by 2% to US$1,114/oz for the six months ended 30 June 2021 from US$1,093/oz for the six months ended 30 June 2020.

The region produced net cash flow (excluding Asanko) of US$181.9m for the six months ended 30 June 2021 compared with US$139.2m for the six months ended 30 June 2020. Gold Fields received US$5.0m on the redemption of preference shares from Asanko for the six months ended 30 June 2021 compared with US$37.5m received for the six months ended 30 June 2020. If included the total cash flow would be US$186.9m for the six months ended 30 June 2021 compared with US$176.7m for the six months ended 30 June 2020.

Tarkwa

June
2021
  June
2020
  %
Variance
 
Ore mined 000
tonnes
  5,178   6,343   (18)%  
Waste (Capital) 000
tonnes
  28,212   21,451   32%  
Waste (Operational) 000
tonnes
  13,001   17,537   (26)%  
Total waste mined 000
tonnes
  41,213   38,988   6%  
Total tonnes mined 000
tonnes
  46,391   45,331   2%  
Grade mined g/t   1.43   1.33   8%  
Gold mined 000'oz   237.8   271.0   (12)%  
Strip ratio waste/ore   8.0   6.1   31%  
Tonnes milled 000
tonnes
  6,982   7,314   (5)%  
Yield g/t   1.14   1.16   (2)%  
Gold produced 000'oz   256.9   271.7   (5)%  
Gold sold 000'oz   256.9   271.7   (5)%  
AISC US$/oz   1,203   988   22%  
AIC US$/oz   1,203   988   22%  
Sustaining capital expenditure US$m   107.7   67.5   60%  
Non-sustaining expenditure US$m       –%  
Total capital expenditure US$m   107.7   67.5   60%  
Net cash flow US$m   115.1   129.4   (11)%  

Gold production decreased by 5% to 256,900oz for the six months ended 30 June 2021 from 271,700oz for the six months ended 30 June 2020 due to lower milled tonnes resulting from lower production days (10 days) compared to 2020. Yield decreased by 2% to 1.14g/t for the six months ended 30 June 2021 from 1.16g/t for the six months ended 30 June 2020 due to lower ore tonnes mined and milled and higher volumes of lower grade stockpiles fed through the mill. Ore rehandled from stockpiles was 2,256kt at a grade of 0.78g/t for the six months ended 30 June 2021 compared to 1,782kt at a grade of 0.78g/t for the six months ended 30 June 2020.

Total tonnes mined, including capital waste stripping, increased by 2% to 46.4Mt for the six months ended 30 June 2021 from 45.3Mt for the six months ended 30 June 2020. Ore tonnes mined decreased by 18% to 5.2Mt for the six months ended 30 June 2021 from 6.3Mt for the six months ended 30 June 2020 due to the focus on capital waste stripping in line with the 2021 mine plan. Capital waste tonnes mined increased by 32% to 28.2Mt for the six months ended 30 June 2021 from 21.5Mt for the six months ended 30 June 2020. Operational waste mined, decreased by 26% to 13.0Mt for the six months ended 30 June 2021 from 17.5Mt for the six months ended 30 June 2020 due to the focus on capital waste stripping in line with the 2021 mine plan. Strip ratio increased by 31% to 8.0 for the six months ended 30 June 2021 from 6.1 for the six months ended 30 June 2020. The high strip ratio is expected to reduce in H2 2021.

All-in cost increased by 22% to US$1,203/oz for the six months ended 30 June 2021 from US$988/oz for the six months ended 30 June 2020 due to higher royalty tax, a contractor mining rate adjustment, the lower gold sold and higher capital expenditure.

Capital expenditure increased by 60% to US$107.7m for the six months ended 30 June 2021 from US$67.5m for the six months ended 30 June 2020 due to higher capital waste expenditure as a result of higher mining unit rates and higher capital waste tonnes mined.

Tarkwa generated net cash flow of US$115.1m for the six months ended 30 June 2021 compared with US$129.4m for the six months ended 30 June 2020 mainly due to the lower gold sold and higher capital expenditure, partially offset by a higher gold price received.

Guidance

The current forecast for Tarkwa indicates that additional capital waste tonnes will be mined in terms of the current mining sequence in 2021 compared to what was included in the original guidance. The additional tonnes mined combined with an increase in the mining contractor rate, timing differences on Tailings Storage Facility (TSF) construction capital and increased royalty charges as a result of the higher gold price received have made it necessary to update the original guidance for Tarkwa to the following:

  • Gold produced ~ 510,000oz (unchanged);
  • All-in sustaining costs ~ US$1,135/oz, original guidance US$1,075/oz; and
  • Total all-in cost ~ US$1,135/oz, original guidance US$1,075/oz.

Damang

June
2021
  June
2020
  %
Variance
 
Ore mined 000
tonnes
  4,277   2,211   93%  
Waste (Capital) 000
tonnes
    8   (100)%  
Waste (Operational) 000
tonnes
  7,527   11,679   (36)%  
Total waste mined 000
tonnes
  7,527   11,687   (36)%  
Total tonnes mined 000
tonnes
  11,804   13,898   (15)%  
Grade mined g/t   1.57   1.47   7%  
Gold mined 000'oz   216.4   104.8   106%  
Strip ratio waste/ore   1.8   5.3   (66)%  
Tonnes milled 000
tonnes
  2,352   2,427   (3)%  
Yield g/t   1.77   1.12   58%  
Gold produced 000'oz   133.5   87.8   52%  
Gold sold 000'oz   133.5   87.8   52%  
AISC US$/oz   753   1,371   (45)%  
AIC US$/oz   810   1,425   (43)%  
Sustaining capital expenditure US$m   5.9   3.7   59%  
Non-sustaining expenditure US$m   4.3   4.7   (9)%  
Total capital expenditure US$m   10.2   8.4   21%  
Net cash flow US$m   66.8   9.8   582%  

Gold production increased by 52% to 133,500oz for the six months ended 30 June 2021 from 87,800oz for the six months ended 30 June 2020 mainly due to higher yield. Yield increased by 58% to 1.77g/t for the six months ended 30 June 2021 from 1.12g/t for the six months ended 30 June 2020. This was primarily a function of the higher feed grade delivered from the main Damang pit complex. The higher grades fed were driven by the drop in the mined volumes of the lower grade Huni Sandstone, coupled with the mining advance through to more consistently mineralised zones. In addition, the 421kt ore rehandled from stockpiles for the six months ended 30 June 2021 was at a grade of 1.96g/t compared with 663kt at a grade of 0.94g/t for the six months ended 30 June 2020.

Total tonnes mined decreased by 15% to 11.8Mt for the six months ended 30 June 2021 from 13.9Mt for the six months ended 30 June 2020 in line with the plan and due to lower production days (10 days) compared to 2020.

Operational waste tonnes decreased by 36% to 7.5Mt for the six months ended 30 June 2021 from 11.7Mt for the six months ended 30 June 2020 in line with the plan. Ore tonnes mined increased by 93% to 4.3Mt for the six months ended 30 June 2021 from 2.2Mt for the six months ended 30 June 2020 due to mining through the banket series which is a more consolidated mineralised ore body at the central portion of the Damang pit.

Gold mined increased by 106% to 216,400oz for the six months ended 30 June 2021 from 104,800oz for the six months ended 30 June 2020 due to higher ore tonnes and grade mined as a result of mining the more consistently mineralised zones of the main orebody at the Damang pit complex. Tonnes milled were largely in line with plant capacity.

All-in cost decreased by 43% to US$810/oz for the six months ended 30 June 2021 from US$1,425/oz for the six months ended 30 June 2020 due to higher gold sold and lower cost of sales before amortisation and depreciation, partially offset by higher capital expenditure.

Capital expenditure increased by 21% to US$10.1m for the six months ended 30 June 2021 from US$8.4m for the six months ended 30 June 2020. Sustaining capital expenditure increased by 59% to US$5.9m for the six months ended 30 June 2021 from US$3.7m for the six months ended 30 June 2020 due to timing of expenditure. Non-sustaining capital expenditure decreased by 9% to US$4.3m for the six months ended 30 June 2021 from US$4.7m for the six months ended 30 June 2020 due to timing of expenditure on the construction of the Far East Tailings Storage Facility (FETSF) raise.

Damang generated net cash flow of US$66.8m for the six months ended 30 June 2021 compared with US$9.8m for the six months ended 30 June 2020 mainly due to the increase in gold sold as well as the higher gold price received.

Abosso Goldfields Limited, through the Ghana Arbitration Centre (GAC), served a notice of demand on BCM Ghana on 9 July 2021 and we expect a reply from BCM Ghana shortly through the GAC.

Guidance

The revised cost guidance published on 6 May 2021 is still intact and remains as follows:

  • Gold produced ~ 275,000oz (unchanged);
  • All-in sustaining costs ~ US$730/oz, original guidance not changed; and
  • Total all-in cost ~ US$840/oz.

Asanko (Equity accounted Joint Venture)

All figures in table on a 100% basis

June
2021
  June
2020
  %
Variance
 
Ore mined 000
tonnes
  3,174   3,271   (3)%  
Waste (Capital) 000
tonnes
  1,479   1,233   20%  
Waste (Operational) 000
tonnes
  17,146   13,945   23%  
Total waste mined 000
tonnes
  18,625   15,178   23%  
Total tonnes mined 000
tonnes
  21,799   18,449   18%  
Grade mined g/t   1.27   1.49   (15)%  
Gold mined 000'oz   129.5   157.0   (18)%  
Strip ratio waste/ore   5.9   4.6   28%  
Tonnes milled 000
tonnes
  2,919   3,038   (4)%  
Yield g/t   1.18   1.39   (15)%  
Gold produced 000'oz   110.4   135.4   (18)%  
Gold sold 000'oz   116.3   129.2   (10)%  
AISC US$/oz   1,314   929   41%  
AIC US$/oz   1,448   1,083   34%  
Sustaining capital expenditure US$m   10.6   12.0   (12)%  
Non-sustaining expenditure US$m   10.2   16.0   (36)%  
Total capital expenditure US$m   20.8   28.0   (26)%  
Redemption of preference shares US$m   5.0   37.5   (87)%  

Gold production decreased by 18% to 110,400oz (100% basis) for the six months ended 30 June 2021 from 135,400oz (100% basis) for the six months ended 30 June 2020 mainly due to lower tonnes milled and yield which decreased by 4% and 15%, respectively.

Total tonnes mined increased by 18% to 21.8Mt for the six months ended 30 June 2021 from 18.4Mt for the six months ended 30 June 2020. Waste tonnes mined increased by 23% to 18.6Mt for the six months ended 30 June 2021 from 15.2Mt for the six months ended 30 June 2020 mainly due to the stripping of Cut 3 at Akwasiso. Ore tonnes mined decreased by 3% to 3.2Mt tonnes for the six months ended 30 June 2021 from 3.3Mt tonnes or the six months ended 30 June 2020.

All-in cost increased by 34% to US$1,448/oz for the six months ended 30 June 2021 from US$1,083/oz for the six months ended 30 June 2020 underpinned by a 10% decrease in gold sales and higher cost of sales before amortisation and depreciation, partially offset by lower capital expenditure.

Total capital expenditure (100% basis) decreased by 26% to US$20.8m for the six months ended 30 June 2021 from US$28.0m for the six months ended 30 June 2020 mainly due to non-sustaining capital expenditure decreasing by 36% to US$10.2m for the six months ended 30 June 2021 from US$16.0m for the six months ended 30 June 2020 as a result of reduced capital strip at the Esaase pit and completion of phase 1 of the Tetrem relocation project.

Gold Fields received US$5.0m on the redemption of preference shares from Asanko for the six months ended 30 June 2021 compared with US$37.5m received for the six months ended 30 June 2020.

Guidance

As a result of higher anticipated ore transportation costs as more material will be mined from Esaase, combined with inflationary cots impacts, the cost and production guidance for Asanko have been revised as follows:

  • Gold produced ~ lower end of the range 225 000oz to 245 000oz (original guidance 235 000oz);
  • All-in sustaining costs ~ US$1,350/oz to US$1,450/oz. (original guidance US$1,235/oz); and
  • All-in cost ~ US$1,500/oz to US$1,600/oz (original guidance US$1,400/oz).

South America region

Peru

Cerro Corona

June
2021
  June
2020
  %
Variance
 
Ore mined 000
tonnes
  3,032   4,260   (29)%  
Waste mined 000
tonnes
  10,469   4,300   143%  
Total tonnes mined 000
tonnes
  13,501   8,560   58%  
Grade mined – gold g/t   0.74   0.81   (9)%  
Grade mined – copper per cent   0.43   0.42   2%  
Gold mined 000'oz   72.4   111.2   (35)%  
Copper mined
tonnes
  12,999   17,950   (28)%  
Tonnes milled 000
tonnes
  3,336   3,364   (1)%  
Gold recoveries per cent   59.6   67.2   (11)%  
Copper recoveries per cent   86.0   87.9   (2)%  
Yield – gold g/t   0.41   0.62   (34)%  
         – copper per cent   0.35   0.40   (13)%  
         – combined eq g/t   0.93   1.00   (7)%  
Gold produced 000'oz   42.5   64.3   (34)%  
Copper produced tonnes   11,247   12,989   (13)%  
Total equivalent gold produced 000'
eq oz
  99.3   108.7   (9)%  
Total equivalent gold sold 000'
eq oz
  103.5   113.0   (8)%  
AISC US$/oz   31   547   (94)%  
AISC US$/
eq oz
  1,041   887   17%  
AIC US$/oz   321   709   (55)%  
AIC US$/
eq oz
  1,162   984   18%  
Sustaining capital expenditure US$m   7.1   8.9   (20)%  
Non-sustaining expenditure US$m   11.7   10.5   11%  
Total capital expenditure US$m   18.8   19.4   (3)%  
Net cash flow US$m   27.9   49.4   (44)%  

In H1 2021 Cerro Corona was impacted by slope instability at the pit as a result of the abnormally high rainfall season which triggered the re-sequencing of the mining plan, impacting on the ore mined from the eastern part of the mine. The new mining sequence considers that the high grade ore from the eastern side of the mine will only be available in 2022, and during 2021 mining will be focused on the lower grade western section of the pit. The re-sequencing does not affect the waste stripping required in terms of the 2030 LoM. The Cerro Corona operation was again impacted by COVID-19 disruptions with the peak of the second wave seen during the March and April months in 2021.

Gold production decreased by 34% to 42,500oz for the six months ended 30 June 2021 from 64,300oz for the six months ended 30 June 2020 mainly due to lower head grade and lower recovery. Copper production decreased by 13% to 11,247t for the six months ended 30 June 2021 from 12,989t for the six months ended 30 June 2020 mainly due to lower copper yield as a result of lower copper head grade and lower recoveries following from the revised mining sequence. Equivalent gold production decreased by 9% to 99,300oz for the six months ended 30 June 2021 from 108,700oz for the six months ended 30 June 2020 underpinned by lower gold and copper grades processed, partially offset by a higher price factor.

Total tonnes mined increased by 58% to 13.5Mt for the six months ended 30 June 2021 from 8.6Mt for the six months ended 30 June 2020 mainly due to an increase in waste mined by 143% to 10.5Mt for the six months ended 30 June 2021 from 4.3Mt for the six months ended 30 June 2020. This is in line with the waste recovery plan implemented at the end of 2020 through the deployment of additional mining fleet and equipment.

All-in cost per gold ounce decreased by 55% to US$321/oz for the six months ended 30 June 2021 from US$709/oz for the six months ended 30 June 2020 mainly due to higher by-product credits resulting from higher copper prices, partially offset by lower gold ounces sold. The by-product credit increased to US$106m for the six months ended 30 June 2021 from US$63m for the six months ended 30 June 2020. All-in cost per equivalent ounce increased by 18% to US$1,162/eq oz for the six months ended 30 June 2021 from US$984/eq oz for the six months ended 30 June 2020 mainly due to lower equivalent ounces sold.

Total capital expenditure decreased by 3% to US$18.8m for the six months ended 30 June 2021 from US$19.4m for the six months ended 30 June 2020 and is mainly related to timing of construction activities.

Cerro Corona generated net cash flow of US$27.9m for the six months ended 30 June 2021 compared with US$49.4m for the six months ended 30 June 2020 with the reduction mainly due to the decrease in gold and copper production.

Guidance

Gold production at Cerro Corona is expected to be 20koz lower at 110koz, with copper production remaining at similar levels. However, the higher copper price has more than offset this impact on a gold equivalent ounce basis. The original cost and production guidance given in the February update is still intact and remains as follows:

  • Gold equivalents produced ~ 220,000oz (unchanged);
  • All-in sustaining costs ~ US$1,030/eq oz (unchanged);
  • Total all-in cost ~ US$1,190/eq oz (unchanged);
  • All-in sustaining costs ~ US$780/oz (unchanged); and
  • Total all-in cost ~ US$1,060/oz (unchanged).

Chile

Salares Norte

Salares Norte total project progress is now at 42% vs plan of 41%, construction progress increased to 30.8% for the six months ended 30 June 2021 compared with 3.8% for the six months ended 30 June 2020. US$149m was spent on the project for the six months ended 30 June 2021 compared with US$44m spent for the six months ended 30 June 2020. The US$149m spent comprised of US$133m capital expenditure, US$13m exploration, a US$12m investment in working capital, a tax payment of US$9m and other cost of US$5m, partially offset by a credit of US$23m from the realised portion of the currency hedge.

Pre-stripping at the Brecha Principal pit commenced in January 2021 and 6.1Mt was stripped for the six months ended 30 June 2021.

The team remains focused on exploring the district, with 12,470 metres drilled for the six months ended 30 June 2021 compared with 8,458 metres for the six months ended 30 June 2020.

Australia region

June
2021
  June
2020
  %
Variance
 
Gold production 000'oz   481.2   493.8   (3)%  
AISC A$/oz   1,447   1,400   3%  
  US$/oz   1,116   919   21%
AIC A$/oz   1,542   1,463   5%  
  US$/oz   1,189   960   24%
Net cash flow* A$m   207.5   317.3   (35)%  
  US$m   160.1   208.3   (23)%
* Includes Australia consolidated tax paid and working capital movements of A$148.2m (US$114.2m) in H1 2021 and A$71.0m (US$46.8m) in H1 2020, respectively.

Gold production decreased by 3% to 481koz for the six months ended 30 June 2021 from 494koz for the six months ended 30 June 2020 mainly due to lower grades of ore mined and processed at Granny Smith and Gruyere and 10 production days less (c.5%) than the comparative period in H1 2020.

All-in cost increased by 5% to A$1,542/oz (US$1,189/oz) for the six months ended 30 June 2021 from A$1,463/oz (US$960/oz) for the six months ended 30 June 2020. US$ all-in cost increased by 23% mainly due to translating the largely A$ based costs into US$ was impacted by a 17% strengthening of the A$:US$ in the comparative period.

The region produced net cash flow of A$207.5m (US$160.1m) for the six months ended 30 June 2021 compared with A$317.3m (US$208.3m) for the six months ended 30 June 2020.

St Ives

June
2021
  June
2020
  %
Variance
 
Underground
Ore mined 000
tonnes
  958   842   14%  
Waste mined 000
tonnes
  384   444   (14)%  
Total tonnes mined 000
tonnes
  1,342   1,286   4%  
Grade mined g/t   4.84   5.12   (5)%  
Gold mined 000'oz   149.2   138.5   8%  
Surface
Ore mined 000
tonnes
  646   1,424   (55)%  
Surface waste (Capital) 000
tonnes
  2,173   1,805   20%  
Surface waste (Operational) 000
tonnes
  1,269   3,501   (64)%  
Total waste mined 000
tonnes
  3,442   5,306   (35)%  
Total tonnes mined 000
tonnes
  4,088   6,730   (39)%  
Grade mined g/t   2.71   1.40   94%  
Gold mined 000'oz   56.2   63.9   (12)%  
Strip ratio waste/ore   5.3   3.7   43%  
Total (Underground and Surface)
Total ore mined 000
tonnes
  1,604   2,266   (29)%  
Total grade mined g/t   3.98   2.78   43%  
Total tonnes mined 000
tonnes
  5,430   8,016   (32)%  
Total gold mined 000'oz   205.4   202.4   1%  
Tonnes milled 000
tonnes
  2,048   2,516   (19)%  
Yield – underground g/t   4.61   4.41   5%  
         – surface g/t   1.67   1.33   26%  
         – combined g/t   2.86   2.33   23%  
Gold produced 000'oz   188.5   188.1   –%  
Gold sold 000'oz   188.5   197.1   (4)%  
AISC A$/oz   1,357   1,346   1%  
  US$/oz   1,047   884   18%
AIC A$/oz   1,398   1,376   2%  
  US$/oz   1,078   904   19%
Sustaining capital expenditure A$m   58.8   51.1   15%  
  US$m   45.3   33.6   35%
Non-sustaining capital expenditure A$m   7.6   5.9   29%  
  US$m   5.9   3.9   51%
Total capital expenditure A$m   66.4   57.0   16%  
  US$m   51.2   37.5   37%
Net cash flow (pre-tax) A$m   174.9   151.8   15%  
  US$m   134.9   99.7   35%

Gold production remained similar at 188,500oz for the six months ended 30 June 2021, notwithstanding the lower number of production days versus the comparative period (c.5%) mainly due to higher yield.

At the underground operations, ore mined increased by 14% to 958,000t for the six months ended 30 June 2021 from 842,000t for the six months ended 30 June 2020 with Hamlet North reaching sustainable production levels by mid-2020. Waste mined decreased by 14% to 384,000t for the six months ended 30 June 2021 from 444,000t for the six months ended 30 June 2020 with lower development at Hamlet North.

In the open pits, ore mined decreased by 55% to 646,000t for the six months ended 30 June 2021 from 1,424,000t for the six months ended 30 June 2020 and capital waste tonnes mined increased by 20% to 2,173,000t for the six months ended 30 June 2021 from 1,805,000t for the six months ended 30 June 2020. This reflects a current focus on the pre-stripping of Stage 7 of the Neptune pit and the new Delta Island open pit. Operational waste tonnes mined decreased by 64% to 1,269,000t for the six months ended 30 June 2021 from 3,501,000t for the six months ended 30 June 2020 as St Ives transitions to a predominantly underground operation. Grade mined increased by 94% to 2.71g/t for the six months ended 30 June 2021 from 1.40g/t for the six months ended 30 June 2020 when St Ives was working through a low grade portion of the Neptune pit.

All-in cost increased by 2% to A$1,398/oz (US$1,078/oz) for the six months ended 30 June 2021 from A$1,376/oz (US$904/oz) for the six months ended 30 June 2020 due to a decrease in gold sold and higher capital expenditure, partially offset by lower production cost from the open pits.

Capital expenditure increased by 16% to A$66.4m (US$51.2m) for the six months ended 30 June 2021 from A$57.0m (US$37.5m) for the six months ended 30 June 2020 with expenditure in 2021 on the new paste plant at the Invincible underground mine.

St Ives generated net cash flow of A$174.9m (US$134.9m) for the six months ended 30 June 2021 compared with A$151.8m (US$99.7m) for the six months ended 30 June 2020 mainly due to lower cost of sales before amortisation and depreciation.

Guidance

Changes in the timing of capital expenditure at the Invincible South paste plant, additional pre-strip at the Neptune open pit Stage 7 (due to an increase in the size of Stage 7), increased royalty charges as a result of the higher gold price received and higher labour increases have made it necessary to update the original guidance for St Ives to the following:

  • Gold produced ~ 360,000oz (unchanged);
  • All-in sustaining cost ~ A$1,393/oz (US$1,045/oz), original guidance A$1,360/oz (US$1,020/oz); and
  • Total all-in cost ~ A$1,445/oz (US$1,084), original guidance A$1,410/oz (US$1,060/oz).

Agnew

June
2021
  June
2020
  %
Variance
 
Underground ore mined 000
tonnes
  522   702   (26)%  
Underground waste mined 000
tonnes
  464   396   17%  
Total tonnes mined 000
tonnes
  986   1,098   (10)%  
Grade mined – underground g/t   6.64   5.05   31%  
Gold mined 000'oz   111.4   113.9   (2)%  
Tonnes milled 000
tonnes
  626   698   (10)%  
Yield g/t   5.55   4.72   18%  
Gold produced 000'oz   111.7   105.9   5%  
Gold sold 000'oz   112.5   105.5   7%  
AISC A$/oz   1,528   1,655   (8)%  
  US$/oz   1,178   1,086   8%
AIC A$/oz   1,692   1,723   (2)%  
  US$/oz   1,305   1,131   15%
Sustaining capital expenditure A$m   36.5   33.0   11%  
  US$m   28.1   21.7   29%
Non-sustaining capital expenditure A$m   18.5   7.2   157%  
  US$m   14.3   4.7   204%
Total capital expenditure A$m   55.0   40.2   37%  
  US$m   42.4   26.4   61%
Net cash flow (pre-tax) A$m   78.5   63.4   24%  
  US$m   60.6   41.7   45%

Gold production increased by 5% to 111,700oz for the six months ended 30 June 2021 from 105,900oz for the six months ended 30 June 2020 due to an increase in grade of ore mined and processed in line with the plan, partially offset by a decrease in ore milled, notwithstanding the (c.5%) lower production days than the comparative period.

Ore mined decreased by 26% to 522,000t for the six months ended 30 June 2021 from 702,000t for the six months ended 30 June 2020 with current focus on development of the Kath orebody at Waroonga and the Sheba ore body at New Holland resulting in a 17% increase in waste tonnes mined to 464,000t for the six months ended 30 June 2021 from 396,000t for the six months ended 30 June 2020.

Grade mined increased by 31% to 6.64g/t for the six months ended 30 June 2021 from 5.05g/t for the six months ended 30 June 2020 due to increased grade of ore mined from New Holland with ore production from the higher grade Sheba ore body.

Ore milled decreased by 10% to 626,000t for the six months ended 30 June 2021 from 698,000t for the six months ended 30 June 2020. The decrease can be attributed to the additional production days in the six months ended 30 June 2020 on the transition to a calendar month-end.

All-in cost decreased by 2% to A$1,692/oz (US$1,305/oz) for the six months ended 30 June 2021 from A$1,723/oz (US$1,131/oz) for the six months ended 30 June 2020 due to increased gold sold and lower cost of sales before amortisation and depreciation, partially offset by increased capital expenditure.

Capital expenditure increased by 37% to A$55.0m (US$42.4m) for the six months ended 30 June 2021 from A$40.2m (US$26.4m) for the six months ended 30 June 2020 driven by a 157% increase in non-sustaining capital expenditure to A$18.5m (US$14.3m) for the six months ended June 2021 from A$7.2m (US$4.7m) for the six months ended June 2020. This increase was due to development expenditure incurred to access the Kath Lower and Sheba Extension ore bodies and works to replace the mill crushing circuit.

Agnew generated net cash flow of A$78.5m (US$60.6m) for the six months ended 30 June 2021 compared with A$63.4m (US$41.7m) for the six months ended 30 June 2020 mainly due to increased gold sold.

Guidance

The original cost guidance given in the February update is still intact and remains as follows:

  • Gold produced ~ 240,000oz (unchanged);
  • All-in sustaining costs ~ A$1,450/oz (US$1,090/oz); and
  • Total all-in cost ~ A$1,625/oz (US$1,220/oz).

Granny Smith

June
2021
  June
2020
  %
Variance
 
Underground ore mined 000
tonnes
  828   870   (5)%  
Underground waste mined 000
tonnes
  447   291   54%  
Total tonnes mined 000
tonnes
  1,275   1,161   10%  
Grade mined – underground g/t   5.02   5.21   (4)%  
Gold mined 000'oz   133.6   145.6   (8)%  
Tonnes milled 000
tonnes
  824   877   (6)%  
Yield g/t   4.58   4.76   (4)%  
Gold produced 000'oz   121.3   134.1   (10)%  
Gold sold 000'oz   122.6   133.9   (8)%  
AISC A$/oz   1,501   1,342   12%  
  US$/oz   1,158   881   31%
AIC A$/oz   1,654   1,473   12%  
  US$/oz   1,276   967   32%
Sustaining capital expenditure A$m   33.8   31.4   8%  
  US$m   26.1   20.6   27%
Non-sustaining capital expenditure A$m   18.8   17.5   7%  
  US$m   14.5   11.5   26%
Total capital expenditure A$m   52.6   48.9   8%  
  US$m   40.6   32.1   26%
Net cash flow (pre-tax) A$m   65.5   114.9   (43)%  
  US$m   50.5   75.4   (33)%  

Gold production decreased by 10% to 121,300oz for the six months ended 30 June 2021 from 134,100oz for the six months ended 30 June 2020 due to decreased tonnes milled as well as lower grades of ore mined and processed, as well as the lower production days versus the comparative period (c.5%).

Underground waste mined increased by 54% to 447,000t for the six months ended 30 June 2021 from 291,000t for the six months ended 30 June 2020 with focus on development of the second decline. For the six months ended 30 June 2021 the second decline was advanced by 1,410 metres.

All-in cost increased by 12% to A$1,654/oz (US$1,276/oz) for the six months ended 30 June 2021 from A$1,473/oz (US$967/oz) for the six months ended 30 June 2020 due to increased capital expenditure and decreased gold sold.

Capital expenditure increased by 8% to A$52.6m (US$40.6m) for the six months ended 30 June 2021 from A$48.9m (US$32.1m) for the six months ended 30 June 2020. The increase in capital expenditure was mainly due to expenditure on development of the second decline. When completed, the second decline will provide a reduction in current congestion in the main decline and will support short interval control measures to maintain the production profile.

Granny Smith generated net cash flow of A$65.5m (US$50.5m) for the six months ended 30 June 2021 compared with A$114.9m (US$75.4m) for the six months ended 30 June 2020. The decrease is due to the lower gold sold and higher capital costs referred to above coupled with a reduction in the gold price received from A$2,504/oz for the six months ended 30 June 2020 to A$2,322/oz for the six months ended 30 June 2021.

Guidance

An increase in the forecast expenditure on royalties as a result of the higher gold price received, higher labour increases and higher contractor mining cost have made it necessary to update the original guidance of Granny Smith to the following:

  • Gold produced ~ 265,000oz (unchanged);
  • All-in sustaining costs ~ A$1,475/oz (US$1,110/oz) same as original guidance; and
  • Total all-in cost ~ A$1,620/oz (US$1,215/oz), original guidance A$1,600/oz (US$1,200/oz).

Gruyere

June
2021
  June
2020
  %
Variance
 
Mine physicals in table on a 100% basis
Ore mined 000
tonnes
  4,548   3,962   15%  
Waste (Capital) 000
tonnes
  13,575   4,339   213%  
Waste (Operational) 000
tonnes
  172   2,269   (92)%  
Total waste mined 000
tonnes
  13,747   6,608   108%  
Total tonnes mined 000
tonnes
  18,295   10,570   73%  
Grade mined g/t   0.96   1.06   (9)%  
Gold mined 000'oz   139.9   134.8   4%  
Strip ratio waste/ore   3.0   1.7   76%  
Tonnes milled 000
tonnes
  4,102   4,113   –%  
Yield g/t   0.90   0.99   (9)%  
Gold produced 000'oz   119.3   131.5   (9)%  
Gold sold 000'oz   121.1   130.0   (7)%  
AISC A$/oz   1,469   1,269   16%  
  US$/oz   1,133   833   36%  
AIC A$/oz   1,486   1,282   16%  
  US$/oz   1,146   842   36%  
Sustaining capital expenditure – 50% basis A$m   27.4   14.4   90%  
Non-sustaining capital expenditure – 50% basis A$m   1.0   0.8   25%  
  US$m   0.8   0.6   33%  
Total capital expenditure – 50% basis A$m   28.4   15.2   87%  
  US$m   22.0   10.1   118%  
Net cash flow – 50% basis (pre-tax) A$m   36.8   58.2   (37)%  
  US$m   28.4   38.2   (26)%  

Gold production decreased by 9% to 119,300oz for the six months ended 30 June 2021 from 131,500oz for the six months ended 30 June 2020 due to lower grades of ore mined and processed, processing plant disruptions at the end of the second quarter and the lower production shifts (c.5%) versus the comparative period.

Mining activity increased during the second half of 2020 following a build-up of contractor mobile equipment on site, as mining operations moved into Stages 2 and 3 of the pit.

Total tonnes mined increased by 73% to 18.3Mt for the six months ended 30 June 2021 from 10.6Mt for the six months ended 30 June 2020. The mix of ore and waste was substantially different during the six months ended 30 June 2021, with a 15% increase in ore mined and a 92% decrease in operational waste mined. Capital stripping increased by 213%, indicative of a focus on pre-strip of Stages 2 and 3 of the pit.

Grade mined decreased by 9% to 0.96g/t for the six months ended 30 June 2021 from 1.06g/t for the six months ended 30 June 2020 in accordance with the mine plan. Yield decreased by 9% to 0.90g/t for the six months ended 30 June 2021 from 0.99g/t for the six months ended 30 June 2020 in line with the grade mined.

All-in cost increased by 16% to A$1,486/oz (US$1,146/oz) for the six months ended 30 June 2021 from A$1,282/oz (US$842/oz) for the six months ended 30 June 2020 due to lower gold sold and increased capital expenditure, partially offset by lower cost of sales before amortisation and depreciation.

Capital expenditure (on a 50% basis) increased by 87% to A$28.4m (US$22.0m) for the six months ended 30 June 2021 from A$15.2m (US$10.1m) for the six months ended 30 June 2020, reflecting the increased pre-stripping of Stages 2 and 3 of the pit.

Gruyere generated net cash flow (on a 50% basis) of A$36.8m (US$28.4m) for the six months ended 30 June 2021 compared with A$58.2m (US$38.2m) for the six months ended 30 June 2020. The decrease is due to the lower gold sold and higher capital costs referred to above coupled with a reduction in the gold price received from A$2,502/oz for the six months ended 30 June 2020 to A$2,345/oz for the six months ended 30 June 2021.

Guidance

As a result of the additional mill maintenance expenditure, increased royalty charges as a result of the higher gold price received and higher labour increases, it became necessary to update the original guidance of Gruyere to the following:

  • Gold produced ~ 280,000oz (100%) (unchanged);
  • All-in sustaining costs ~ A$1,395/oz (US$1,045/oz), original guidance A$1,310/oz (US$985/oz); and
  • Total all-in cost ~ A$1,415/oz (US$1,060/oz), original guidance A$1,330/oz (US$1,000/oz).