[miningmx.com] — GOLD Fields has stepped on the gas in development plans for a number of international projects, but the proposed uranium recovery plant in South Africa has been placed on the back burner.
CEO Nick Holland has previously described the uranium project – which would treat surface material owned by the group’s Driefontein and Kloof mines – as a “fifth mine’ in South Africa.
Speaking at the Gold Fields December quarterly presentation in Johannesburg on Friday, Holland said: “We have choices and the uranium project is no longer a top priority for us.
“I am not saying the uranium project is not going to happen, but I am saying don’t expect an announcement anytime soon.’
Instead, Gold Fields’ attention is focused on new mines to be developed in countries like Peru, the Philippines, Finland and Mali as well as the delivery of important brownfields expansions to its existing St Ives mine in Australia.
The only big South African project to be tackled by Gold Fields over the next five years on current planning is the continued ramp-up of production from the South Deep mine.
Gold Fields’ strategy in South Africa appears to be one of damage control, with management focused on halting the declining production trend shown over recent years.
In reply to an analyst’s question, Holland agreed that failure to stabilise the SA operations represented the biggest risk to Gold Fields’ plans to hit its stated target of 5 million ounces (m oz) of gold either being produced or in development annually by 2015.
Gold Fields currently produces about 3.5m oz of gold annually, of which 50% is sourced from South Africa.
Investor presentations by Gold Fields over the past year have indicated a minimal contribution from South Africa to group growth targets because rising production from South Deep is likely to be offset by falling output at the Kloof, Driefontein and Beatrix mines.
Holland said: “Stabilising our SA operations is fundamental to our plan. If the declining trend in production continues, we risk losing critical mass which is a major issue when it comes to decisions on keeping a big shaft system going.’
Holland described Gold Fields’ pipeline of projects as “the best we have ever had’.
He said: “Our 5m oz/year target is no longer a strategic wish list but a reality that is coming at us very quickly, and which will be transformational for Gold Fields.’
The two projects running neck-and-neck to get the first go-ahead decision for mine construction appear to be Yanfolila in Mali and Arctic Platinum (APP) in Finland.
At Yanfolila, Gold Fields is targeting a 200,000oz/ year “starter project’ mining an initial reserve of between 1.5m oz and 2m oz, with a scoping study due by the third quarter of 2011.
The mine could ultimately turn out far larger than this, with Holland describing it as “an emerging camp in elephant country.’
Gold Fields has controlled APP since 2001 and completed an initial feasibility study in 2003, but it has remained what Holland termed “the sleeper’ in Gold Fields’ project portfolio.
That’s despite its considerable platinum group metal (pgm) resource estimated at 12m oz in which palladium is the dominant metal.
The surge in pgm prices, combined with positive results from a new metallurgical recovery process, seem to have finally galvanized Gold Fields into action.
Bulk sample drilling is under way, along with a pilot plant study which is due to be completed by the end of this year.
Looking further out, Holland was bullish on prospects for the Chucapaca gold/copper project in Peru and the Far Southeast gold/copper project in the Philippines.
At Chucapaca, an initial inferred resource of 5.6m oz gold equivalent (gold plus associated copper content) has been delineated in the 18 months since the deposit was first discovered.
According to Gold Fields South America region vice-president Juancho Kruger, “this is our next mine in South America with a construction decision to be taken within the next 18 to 24 months.’
The ongoing drilling programme has shown the ore body remains open to the west, with the latest borehole results confirming the high grades and continuity of the mineralisation drilled out so far.
Then there’s the Far Southeast project in the Philippines, which Holland is already describing as a “world class deposit with exceptional grades’ despite its early stage of development.
He said: “Tthe next six months should allow us to firm upon the size and quality of the ore body with a feasibility study to be carried out in 2012. “
The writer owns shares in Gold Fields.
