Johannesburg - Gold Fields has cut 1.1m ounces out of production from its two largest mines to address safety concerns at its South African operations. The world's third-largest producer is on track to bring 800 000 oz of gold on stream in five years from South Deep.
Gold Fields said during a presentation on its reserves and resources that its biggest growth project South Deep is on track to produce those 800 000 oz by 2014 at an all-in-cost of R130 000/kg in real terms and that it had put on the backburner plan to exploit the deeper parts of the ore body.
CEO Nick Holland said that with the inclusion of the 12m attributable ounces at the Uncle Harry's bit of ground contiguous to South Deep and a pocket of reef called the Wrench, Gold Fields had 30m ounces of gold above infrastructure that would keep it busy for a while.
Gold Fields is drilling the Uncle Harry's ground for which it will submit a mining application in September. The plan is to bump ounces up into the reserve category and add these ounces, which can be reached from existing infrastructure, into the mine plan to extract 330 000 tonnes of ore/year and 800 000 oz, Holland said.
Exploiting the deeper part of the mine, utilising infrastructure at the neighbouring Kloof mine, will happen, but that was "still some years off", Holland said.
Holland, whose tenure as chief executive coincided with the death of nine workers in a shaft accident at South Deep at the start of May 2008, has said the company will not mine where it is not safe to do so.
As part of this drive to improve safety, Gold Fields initiated a review of its extraction of pillars, which are blocks of ground left behind in previous operations because they were geologically complex or not economically feasible to mine.
Mining cancelled
This review based on a risk tolerability framework and an empirical seismic risk model, which Gold Fields head of South African operations Vishnu Pillay reckons could become an industry standard, has caused the company to cut the 1.1m oz out of production.
The review has cancelled the mining of 60 000 oz of gold at Driefontein, the largest mine in the group, over the life of the operation.
At Kloof, the figure is 500 000 oz.
The grades at the two mines have dropped because of the exclusions of a portion of the pillars. At Driefontein, the grade has dropped to 8.5 grams a tonne from 9.2 g/t, and at Kloof it has fallen to 8.7 g/t from 9.1.
"These changes in grade are not significant enough to impact the production profile at these two mines," Pillay said.
There will be a continuous monitoring of the remaining pillars using the two methods in the review and any deterioration will result in Gold Fields stopping work at the affected area, he said.
Gold Fields also wants the millions of pounds it has in tailings dumps to be recognised in its share price. By the end of the year it will have made a decision on whether it will exploit that uranium itself, sell it or bring in a partner, Holland said.
Of the two dumps it has drilled so far, it has a resource of 11.4m pounds of uranium and 1.2m oz of gold. It has another six dumps it is drilling during the current financial year to end-June 2009.
The uranium in the dumps averages 0.07 kg/tonne and the gold 0.47 g/t.
Gold Fields has another 11m pounds of potential uranium resources at Beatrix 4 Shaft in the shallow parts of the Beisa reef and a technical review on that will be completed soon and a SAMRAC compliant resource released, said Pillay.
- MiningMX.com
For more mining sector coverage, go to miningmx.com.