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| South Deep Gold MineTechnical Short Form Report South Deep Gold Mine is an intermediate to deep level gold mine comprising two shaft systems that mine various auriferous conglomerates from open ground and pillars that occur at depths between 1,575 m and 3,500 m below surface. The shaft systems comprise the older South Shaft complex with its main shaft and two sub vertical shafts, and the newer flagship complex, known as Twin Shafts. Ore is processed at a central metallurgical plant. The mining rights comprise a total of 3,566 ha. The key milestones for South Deep in the next three years include:
These milestones are necessary to facilitate the build up to full production by December 2014. At full production South Deep will produce between 750 – 800 koz pa. This Technical Short Form Report reflects the latest Life of Mine plan, coupled with an updated Mineral Resource and Mineral Reserve statement, as at 30 June 2009. All Mineral Resource and Mineral Reserve figures reported are managed unless otherwise stated and Mineral Resources are inclusive of Mineral Reserves. Salient Features
Key Features
Operating Statistics
* 2007 figures for 7 months (December 2006 – June 2007) Geological Setting and Mineralisation The South Deep Gold Mine lies at the northwestern edge of the Witwatersrand Basin, known as the West Rand Goldfield. The mining right area is underlain by outliers of Karoo Supergroup shales and sandstones followed by the Pretoria Group sediments and the Chuniespoort Group dolomites. The Chuniespoort Group overlies the Klipriviersberg Group volcanic rocks, which in turn are underlain by the Central Rand Group that hosts the gold-bearing conglomerates (reefs), exploited by South Deep. The reef horizons exploited at South Deep include the Ventersdorp Contact Reef (VCR) and the stacked reef horizons that comprise the Upper Elsburgs. An important feature of this deposit is defined by a linear north-northeast trending subcrop of the Upper Elsburg reefs against the VCR. To the east of the subcrop, high grades associated with wider payable bands are found in the proximal zone while in the more distal areas, higher grade zones occur in narrow bands. The primary economic target is the Upper Elsburg reef package with the VCR being a secondary economic target. Local geology In the western half of the mining authorisation, the VCR occurs as a single reef horizon that overlies the footwall lithologies of the Upper Elsburgs succession. The Upper Elsburgs, which subcrop below the VCR in a north-northeast trend, comprise multiple stacked reef horizons that form part of an easterly divergent clastic wedge. This wedge attains a thickness of approximately 130 m in the vicinity of the eastern boundary of the mining authorisation. The structure at South Deep is dominated by north-south trending fault systems, which include the West Rand, Panvlakte and Waterpan Faults. The stratigraphy and the West Rand – Panvlakte Faults are further offsets by younger east-west trending local wrench faults that generally have a dextral displacement. The West Rand/Panvlakte/Waterpan horst block is situated between the Kloof and South Deep Gold Mines and regionally demarcates the western boundary of South Deep. A series of dykes also straddle the mine lease, are orientated roughly north-south, and can attain thicknesses of up to 35 m. The younger, post Black Reef age dykes separate the overlying dolomite into water compartments. The Upper Elsburg Reefs constitute 93% of the Mineral Reserves and are an ideal mechanised mining target, while the VCR constitutes the remaining 7%. VCR The VCR represents the final phase of sedimentation prior to the extrusion of the lavas of the Klipriviersberg Group and unconformably overlays the Upper Elsburgs and strata. The VCR structure and facies model has been updated using the latest available information, which will facilitate 3D evaluation and more efficient mine design and scheduling. VCR sedimentation is independent from that of the Upper Elsburgs and is characterised by quartzite dominated facies types. Two facies types are recognised, with Sandy 1 defined as always having a basal conglomerate developed whereas the Sandy 2 type is predominantly of quartzite. By implication the Sandy 1 facies is the higher grade prospective target. The VCR strikes roughly east-west and has a regional dip of approximately 150 to the south-southeast. Local variations in dip are largely due to structure. Upper Elsburgs A paradigm improvement in the stratigraphic and sedimentological resolution within the Upper Elsburg reef units has been developed over the past two years, which will facilitate 3D evaluation and fit for purpose mine design and scheduling. Updated models are being generated using improved resource modelling techniques, in line with Gold Fields protocols. Importantly, accurate grade and tonnage factors are now defined for mining of the Upper Elsburgs. The Upper Elsburgs represent a broad upward coarsening cycle of conglomerates and interbedded quartzites within which several smaller upward fining cycles occur. The discrete stratigraphic units of which currently 16 are described, are the product of these smaller upward finding cycles. The bases of each of the conglomeratic units are unconformity bounded surfaces with nine such unconformity bounded sequences distinguished. With each of the unconformity bounded sequences, economic gold mineralisation shows a strong positive spatial correlation with the coarse conglomeratic units, while the matrix supported (sandy) conglomerate units generally host sub to uneconomical gold concentrations. Based on these associations, gold distribution within each of the stratigraphic units is being remodelled. The Upper Elsburgs have an average dip of some 120 toward the south-southeast, but this is effected by a low amplitude, high wave length regional syncline that trends approximately north-south through the centre of the mine. This feature is more pronounced towards the south of the property.
Exploration and Drilling The tempo of exploration has significantly increased year-on-year and is multi-disciplined with a combination of surface and underground drilling as well as seismic re-modelling to test future mining extensions, structural complexity and economic potential. Gold Fields was pleased to announce that on 27 July 2007, an agreement was reached in terms of which JCI and Randgold and Exploration Company Limited (R&E) will relinquish certain rights which they have to the Uncle Harry’s ground, this being subject to the approval of the shareholder representation of at least 50% of the shares entitled to vote at general meetings of both JCI and R&E. Uncle Harry’s equates to the Kalbasfontein Prospecting Right. It is estimated that the contiguous ground immediately to the east of South Deep, contains an Inferred Mineral Resource of 14.6 Moz at a cut-off grade of 3 g/t. This ground will be accessed through the existing South Deep infrastructure. An extensive exploration programme was initiated in 2007, to facilitate improved planning and optimisation to ensure robust geological and evaluation models. Results of this programme will underpin the resource definition of the VCR and the evaluation of the Upper Elsburg reefs. The programme will provide clarification on the orebody potential below infrastructure as well as an assessment of the regional potential of contiguous Prospecting Rights, which includes the Uncle Harry’s ground. Underground drilling A major capital Long Inclined Borehole (LIB) drilling programme has been initiated at South Deep on 95 and 110 levels. This drilling programme is designed to provide geological structure, facies and grade information in current mining areas, in zones below current infrastructure and south of the Wrench Fault which duplicates 110 level further south. The two year drilling programme involves some 17.4 km of drilling at an estimated cost of R15.3 million. Conventional underground grid, prospect and infill grade control drilling is also planned for F2010 and will mainly take place from 95 level to evaluate both the VCR and Upper Elsburg reefs.
Surface drilling The surface drilling programme that targets the Upper Elsburgs and VCR in the Phase II ground below 110 level, started in the first quarter of F2008. The programme is planned for 14 boreholes at an estimated cost of ~R200 million and is scheduled for completion by the end of F2011. Of the nine rigs currently in the field, four will focus on intersecting the comparatively thin but closely stacked proximal Upper Elsburg succession immediately east of the subcrop. The remaining rigs are targeting the thicker, more distal Upper Elsburgs towards the east in the Uncle Harry’s area. Post successful completion of this phase of drilling the rigs will move to drill three holes for the Upper Elsburgs in the east of the Mine Lease Area. A further three holes are planned to test the VCR west of the Elsburg subcrop.
3D Seismic survey A 3D survey, originally acquired and processed in 2004 as a split data set over the deeper portions (below infrastructure) of the Kloof and South Deep gold mines, was merged after the acquisition of the South Deep Gold Mine, into one project to facilitate improved structural modelling across one contiguous area. The South Deep 3D seismic survey provided high quality data and gives an excellent image of the VCR reflector and structure disrupting it (known structure incorporated into seismic interpretation). The merged data set will also be utilised to produce an holistic regional tectonic model for the West Wits area.
Mining South Deep is a fully mechanised operation (both stoping and development). The focus in the immediate future will be on expediting development accessing the orebody, completing the Twin Shaft infrastructure and increasing the rate of mechanised de-stress mining. Capital expenditure for F2010 is estimated at R1.7 billion, concentrating on establishing infrastructure to underpin future production and gold output. The infrastructure projects are being undertaken to increase production to 330 kt per month and 750 – 800 koz per annum within a five year timeline. Procurement of the low profile trackless equipment is complete.
Mining methods South Deep Gold Mine comprises two shaft systems (including two sub-vertical shafts) and one processing plant. The VCR will be mined by a low profile mechanised mining method, whereas the Upper Elsburgs will be mined by a variety of mining methods ranging from mechanised drift-and-fill or modified drift-and-bench to longhole stoping. Ore is drilled with trackless twin boom, blasted and taken by Load-Haul- Dumpers (LHDs) to internal ore passes for transport to hoisting shafts. At South Deep, the main target horizon is predominantly in the Upper Elsburg Massives zone. In order to extract this ground at depths, which range from 2,500 to 3,500 m below surface (currently on average at a depth of 2,693 m below surface), the in situ rock stresses need to be reduced from 80 mpa to between 30 and 40 mpa. This enables the mining of large excavations at close proximity. To achieve this, the main target horizon needs to be de-stressed by mining a 2 m slice through the package in an optimal position to ensure a de-stressed window of 50 to 60 m above or below the associated stope. Historically, this was done through conventional mining techniques, but due to low face advances achieved, de-stress mining is now also done using mechanised mining techniques. Backfill is an integral part of the mining method, and is essential to promote both local and regional stability. The Upper Elsburg Massives are the main target horizon and the extraction thereof will be done with the aid of mechanised mining equipment after completion of the de-stress mining. Various mining methods are adopted and are applied in terms of the thickness of the reef target as well as in terms of the payability of the reef. These mining methods in the various projects of the mine can be summarised as follows:
– Top and bottom accesses are mined to access the longhole stope;
Mine planning and scheduling Mine design and scheduling at South Deep is done in Mine 2-4D and Earthworks Project Scheduler (EPS) software, on a Datamine platform. All designs are based on three dimensional resource models. Due to the depth of the orebody, mining of de-stress horizons has to be scheduled such that sufficient reserves are made available for massive mining extraction. Large mechanised targets are then sequentially scheduled for extraction within the de-stress envelopes. Backfill scheduling is also incorporated in the extraction sequence, both for the de-stress and the massive horizons. All designs and schedules are completed in consultation with production and all technical personnel, to ensure safe and efficient layouts and plans. Production efficiencies are based on past experience and production models describing activities for the different fleet combinations.
Mineral Reserve development will continue to be a key performance indicator in F2010 and will be accelerated further in appropriate areas. The following table details the development advanced for the last 12 months to June 2009. A total of 7.1 km was developed with 4.3 km driven on-reef.
Projects Several capital intensive projects are ongoing to facilitate the buildup to full production by December 2014. Capital expenditure of R8,4 billion is being invested from now through to July 2014 to build the mine to full production (330 ktpm reef and ~ 750 koz pa). The following projects are on the critical path in the buildup:
Mineral Processing The milling circuit includes a Semi Autogenous Grinding (SAG) Mill for primary milling and secondary milling conducted in an overflow Ball Mill, with classification done using a cluster of cyclones. The recovery of free gold is achieved using two Knelson concentrators, with the concentrate being tabled using a Gemini table in the smelt-house. The cyclone overflow is thickened before the slurry reports to the leach circuit. The leach circuit has six mechanically agitated tanks each with a 3,000 m3 volume. Gold dissolution is achieved with the use of cyanide with lime being added to ensure protective alkalinity. South Deep has an eight stage carousel type Carbon in Pulp circuit with 200 m3 tanks for gold absorption using carbon. Carbon stripping is achieved using the AARL elution system and carbon regeneration is carried out in a rotary kiln at a rate of 500 kg/hr. Gold recovery from solution is by electro-winning using the Kemix Sludge Reactors, followed by drying and then smelting in an induction furnace to produce gold bullion. Concentrates from the Gemini Table are calcined and smelted in the induction furnace. Both mill and cyanide bars are then marked appropriately and dispatched to Rand Refinery via helicopter. Installed processing capacity is 220 ktpm with modular expansion to 330 ktpm planned in the original design. The additional capacity is required during F2013.
Sustainable Development Gold Fields has embraced Sustainable Development as a business imperative, which is reflected in its Vision, Values and Strategy. Through this, Gold Fields has introduced structures that encourage a networked interface between disciplines like Safety, Health, Environmental Engineering, Natural Environment, Risk, Stakeholder Engagement, Legal and Communication. This approach has allowed Gold Fields to capitalize on synergies and to avoid duplication. In this regard, several Key Performance Indicators (KPIs) are monitored and utilized to make informed business decisions. In terms of community involvement, South Deep supports (i) local schools and an orphanage through provision of a feeding scheme and by paying the salaries in some cases, (ii) community centres by providing a house for abused women and children, and (iii) the community at large through different HIV/Aids prevention programmes. South Deep’s environmental initiatives are focused on reducing the impact that the mine may have on the receiving environment through concurrent rehabilitation and responsible water management. Water management is a high priority. All potential sources of pollution like the water discharges are monitored and sampled on a regular basis. The lost time frequency rate for the period 1 July 2008 to 30 June 2009 was 5.78 and a fatality injury frequency rate of 0.00 per million man-hours worked. The fall of ground prevention campaign has reduced such incidents but highlighted the future need to remain every viliglant and to focus on slip and fall, and material handling risks. Hoisting capacity
Plant capacity
Mineral Reserves per mining area
Mineral Resources and Mineral Reserves Gold Fields’ South Deep 30 June 2008 attributable Mineral Resources and Mineral Reserves were primarily based on the pre-acquisition figures as declared for December 2005. These were audited by an Independent Review Panel of consultants for the Barrick Gold—Western Areas Joint Venture between Barrick Gold South Africa (Pty) Limited (formerly, Placer Dome South Africa Proprietary Limited) and Western Areas Limited for Old Mine, Phase 1 and Phase 2, but updated by Gold Fields to 30 June 2008 for mining depletions. Gold Fields has, however, remodelled, re-evaluated, designed and scheduled the upper Elsburg Reefs in current Mine (87 to 110 level) in accordance with Gold Fields standards and procedures. The 30 June 2009 Mineral Resources and Mineral Reserves are based on new resource estimation and mine design work completed over the past 12 months, which has resulted in approximately 50% of reserved ounces having been remodelled and designed (previously 12%). The remaining Mineral Resources and Mineral Reserves are as previously reported at 30 June 2008 (i.e. acquisition figures). Mineral Resources Mineral Resources are reported as in-situ, on an inclusive basis. As at 30 June 2009, the total Mineral Resource estimate at the South Deep Gold Mine, using a gold price of R285 000/kg, was as follows:
* Gold Fields own an attributable 74% thereof, with the balance being held by Peotona. The Mineral Resource estimate for underground uranium and the gold and uranium in the Tailings Storage Facility (TSF), are included for the first time and the figures are as follows:
Modifying factors
Mineral Reserves Mineral Reserve estimation at South Deep is based on development of an appropriately detailed and engineered LoM plan, which accounts for all necessary access development and stope designs. All design and scheduling work is undertaken within mine planning software. As at 30 June 2009, the total Mineral Reserve estimate at the South Deep Gold Mine, using a gold price of R230 000/kg was as follows:
#Approximately 94% of Proved Mineral Reserves and Probable Mineral Reserves (AI) are re-estimated and designed. The remaining Proved and Probable Mineral Reserves (AI) and of Probable Mineral Reserves (BI) are as per acquisition model. Regulatory Codes SAMREC JSE Sarbanes-Oxley Act Environmental
Competent Persons M Cameron: Manager Mine Planning and Resource Management R Pillaye: Chief Geologist P Obermeyer: Chief Resource Geologist A Miller: Chief Surveyor D Siebert: MRM Planning Key Technical Staff
South Deep History at a Glance
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