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Buoyant Gold Fields expects to beat cost guidance, keep output in line - Mining Weekly

Wednesday, 27 January 2016

JOHANNESBURG (miningweekly.com) – Gold mining company Gold Fields, which is benefiting from upward surges in its share price, is poised to beat 2015 cost guidance and report production in line with the company’s forecast.

The Johannesburg- and New York-listed company said in a Stock Exchange News Service announcement on Wednesday that unit costs would likely beat the improved guidance published in November and 2015 gold production would come within a hair’s breadth of the guided 2.17-million ounces at an estimated 2.16-million ounces of group attributable gold equivalent.

The company said that it expected its all-in sustaining costs (AISC) to be $15/oz better than guidance at $1 020/oz and its all-in costs (AIC) to improve by $20/oz to $1 035/oz.

Fourth-quarter (Q4) production of 566 000 oz is expected, with fourth-quarter AISC coming in $8/oz better than Q3’s at $940/oz and final-quarter AIC $11/oz better than Q3’s at of $950/oz.

Q4 output at Gold Fields' only remaining South African operation, the South Deep gold mine west of Johannesburg, is expected to be 68 100 oz, up 13 000 oz on Q3’s 54 900 oz.

The company’s four Australian operations are expected to contribute a Q3-beating 263 000 oz but lagging are Ghana with 5 600 oz fewer at 168 800 oz and Peru with 12 900oz fewer at 65 900 oz.

Creamer Media’s Mining Weekly Online can report that an independent study into Gold Fields’ Damang gold mine in Ghana will determine whether its central pit is recapitalised – possibly at a level of $100-million – or its inherent value preserved until gold prices recover.

Gold Fields may be in a position to announce its capitalise-or-shut decision when it presents its financial results on February 18 but will more likely do so at the end of the first quarter.

The study will evaluate the technical and commercial merits of a push-back below and around Damang’s original pit, where mining ceased in 2013.

Consideration is being given to having a smaller higher-grade project in the centre, which could extend the mine life by eight to ten years.

In the three months to September 30, South Deep increased production by 42%, which resulted in Gold Fields’ share price rocketing by 29%, its highest single leap in 16 years.

The fully mechanised South African mine’s production surge stemmed from achieving ‘plan the mine, mine the plan’ basics as well as converting the low-profile 2.5 m vertical height to a high-profile 5 m vertical height to make mining simpler, as well.

South Deep is now expected to break even by the end of 2016.

Longhole stoping accounted for 40% of total ore tonnes mined, support improved by 14% to 1 584 m and backfill cubes increased by 42% to 113 m3, improving mining flexibility.

The high-profile environment opens the way for conventional jumbo drill rigs to gain access to the open stopes, support them, mine them and backfill them.A three-dimensional visualisation model of South Deep is under development and will be used to point the way forward for the mine.

At Gold Fields St Ives mine in Australia, both aerial and underground drones are producing visual data for machine learning and mining software.

Shortly, in Australia, Gold Fields will be able to automate geology mapping, ground support design and load-haul dumper controls and could possibly introduce driverless trucks.


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