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Cerro Corona key to Gold Fields' S.American plans
Allan Seccombe
Posted: Sun, 13 Jul 2008
[miningmx.com] -- GOLD Fields will put in place plans over the next three years to bring output in South America, West Africa and Australasia to a million ounces each and could, as part of those plans, more than double production at Cerro Corona in Peru.
The limitation on extending the 15-year life of mine at Cerro Corona in northern Peru, however, is establishing a site for a second tailings dump. The first dump will fill two valleys at the 4 km-high project in the Andes, where community relations are vitally important to untrouble operations.
A number of options are under investigation for a second tailings dam, but each have factors rendering them less than perfect.
The current mine plan exploits 5.6 million ounces in 94 million tonnes of ore out of a potential 230 million tonnes.
“We could potentially more than double the size of the mine depending on
tailings facilities,” said Willie Jacobsz, senior vice president of North American investor relations.
There are social, political and environmental issues to address, including the relocation of families. The Andes is a traditional hotbed of political unrest in Peru's past and Gold Fields is treading very carefully in its relationship with the approximately 4,000 people living around the project.
Much like its mining operations in Africa, Gold Fields is interacting closely with the community, building schools, roads, suppling electricity and rectifying legacy issues it inherited when it bought the project.
The copper gold porphyry deposit will produce an average 375,000 oz of gold equivalent ounces a year in concentrate, which will be trucked 400 km to the Salaverry port. The plant has been built to accomodate modular expansions if needed.
Cerro Corona has struck an agreement with the nearby Yanacocha mine owned by Newmont to build a loop on
the road via Cajamarca to lop 50 km off the route. Cerro Corona will pay 20% of the $55m cost and Yanacocha the rest.
“We’ve got a very good deal there,” said Juan Luis Kruger, head of Gold Fields’ South America division.
The mine, where guests suffering from altitude sickness are quickly treated by a medic, will be in full production from December 2008.
“Cerro Corona is the first piece of the puzzle for us in South America,” said Kruger.
In the next three years Gold Fields intends putting the framework to build South American production up to a million ounces, with similar time frames for West Africa and the Australasian region, including China, to bring each of those regions to a million ounces in production.
“If all goes well, in three to four years Gold Fields will have a clear strategy to get to production to five million ounces,” Jacobsz said. South Africa has a base production of two million ounces.
Gold Fields has to
make a call soon on what its view of China is and whether it intends continuing exposure to the region, Jacobsz said, adding the company was giving itself a year to make that decision.
Gold Fields has a 19.9% stake in Sino Gold, which is exploring China.
Gold Fields will also soon make a decision on what to do with the uranium locked up in tailings dumps at its three South African mines. The uranium-rich Beisa reef, which will entail a new mine, is on the back burner.
Harmony Gold recently put its Randfontein tailings into a venture with Pamodzi Resources, creating a new company called Rand Uranium, headed by former Gold Fields’ executive John Munro.
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