Safety stops batter Gold Fields mines

Allan Seccombe | Thu, 01 Oct 2009 11:42
[miningmx.com] -- Gold Fields' group production in the September quarter was smack on target of 905,000 oz at an average total cash cost of $590/oz, but safety stoppages batter the Driefontein and Kloof mines, which show heavy set backs.

The only significant change to the group target was the notional cash expenditure (NCE) figure, which is now forecast to come in at $835/oz compared to an earlier forecast of $850. NCE is the total, all-in cost to produce an ounce of gold.

South African gold production is fractionally lower at at 527,000 oz in the three months to end-September against 529,000 oz in the previous quarter. That figure, however, belies the difficulties at the group's two major South African operations.

"Both Driefontein and Kloof had a difficult quarter mainly as a result of safety-related stoppages later in Q4 F2009 [the June quarter], which affected production early in Q1 F2010," said chief executive Nick Holland.

Management forecast in August that Driefontein was to produce 6,300kg at a total cash cost of R167,200/kg. This is against the June quarter's production of 6,630kg at R129,400/kg.

The latest forecast for Driefontein is for production of 5,892kg. There was no cost estimate.

Kloof, which in August was forecast to produce 5,200kg, is now expected to generate 5,024kg, close to what it produced in a safety-impacted June quarter. Again there was no cost estimate.

Work continues to push production at Driefontein and Kloof to 6,500kg and 5,500kg per quarter respectively, Holland said.

These two mines were at the heart of the Gold Fields drive to improve infrastructure to improve safety. It was that drive that diverted management focus from carrying out enough ore development, which consequently creates underground mining flexibility to give consistent production. Behind improving safety, this is the most important challenge Gold Fields is now addressing.

"As flexibility improves over the next 12 to 24 months, we expect all of the South African mines to achieve greater stability, predictability and consistency in their performance," Holland said.

The declining output at these two mines was offset by improved performances at Beatrix, which is seen at 3,473kg against the August forecast of 3,200kg. South Deep will now contribute 2,032kg against the August expectation of 1,900kg.

In Australia, the St Ives mine will come in about 10,000 oz lower than expected at 100,000 oz because rehabilitation work at the Belleisle mine to repair an underground ground fall is taking longer than expected. There was also a lock up of gold which should reverse in the December quarter.