Gold Fields South Deep Rebase Plan Media Site Visit Presentation - - PowerPoint PPT Presentation
Gold Fields South Deep Rebase Plan Media Site Visit Presentation - - PowerPoint PPT Presentation
Gold Fields South Deep Rebase Plan Media Site Visit Presentation March 2017 Forward looking statements Certain statements in this document constitute forward looking statements within the meaning of Section 27A of the US Securities Act of
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Forward looking statements
Certain statements in this document constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. In particular, the forward looking statements in this document include among others those relating to the Damang Exploration Target Statement; the Far Southeast Exploration Target Statement; commodity prices; demand for gold and other metals and minerals; interest rate expectations; exploration and production costs; levels of expected production; Gold Fields’ growth pipeline; levels and expected benefits of current and planned capital expenditures; future reserve, resource and other mineralisation levels; and the extent of cost efficiencies and savings to be achieved. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa, Ghana, Australia, Peru and elsewhere; the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions, exploration and development activities; decreases in the market price of gold and/or copper; hazards associated with underground and surface gold mining; labour disruptions; availability terms and deployment of capital or credit; changes in government regulations, particularly taxation and environmental regulations; and new legislation affecting mining and mineral rights; changes in exchange rates; currency devaluations; the availability and cost of raw and finished materials; the cost of energy and water; inflation and other macro-economic factors, industrial action, temporary stoppages of mines for safety and unplanned maintenance reasons; and the impact of the AIDS and other occupational health risks experienced by Gold Fields’ employees. These forward looking statements speak only as of the date of this document. Gold Fields undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this document or to reflect the
- ccurrence of unanticipated events.
South Deep Reabse Plan, 9 March 2017
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Overview of South Deep performance in 2016
Reached key milestone of cash breakeven
- Strong safety performance with a TRIFR of
2.42 (FY 2015: 2.91)
- FY16 production and costs beat revised
guidance
- Cash positive for the first time
̵ Net cash flow of US$12m (R175m)
generated in 2016
- Most of the key skills are now in place
̵ Resignation of Nico Muller in December –
the search for a replacement is ongoing
- Rebase Plan announced
̵ Steady state production of 500koz at AIC
below US$900/oz
FY 2016 FY 2015 Q4 2016 Q3 2016
Production koz 290.4 198.0 80.9 69.4 AISC US$/oz 1,207 1,490 1,097 1,289 AIC US$/oz 1,234 1,559 1,122 1,317
South Deep Reabse Plan, 9 March 2017
200 400 600 800 1000 1200 1400 1600 1800 50 100 150 200 250 300 350 2013 2014 2015 2016
Production (koz) and AIC (US$/oz)
Production AIC 200 400 600 800 1000 1200 1400 1600
- 140
- 120
- 100
- 80
- 60
- 40
- 20
20 2013 2014 2015 2016
Net Cash Flow (US$m) and gold price (US$/oz)
Net CF Gold price
Operational strategy and progress
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Fix the base - Business improvement
Strategy and Progress
Program Total Projects Projects Completed 2017 2018 People 9 7 2
- Health and Safety
5 3 2
- Fleet and Fleet Management
11 5 4 2 Infrastructure 16 6 6 4 Mining 15 2 8 5 Mineral Resource Management 10 5 4 1 Financial and Administration 2 1 1
- TOTAL
68 29 27 12
- Management Team
- Technical Support
- Mechanised Mining Up-Skilling Program
People
- Ensure Statutory Compliance
- Safety Incident / Behaviour Management System
- Implement tracking and flagging system (ISOMETRIX)
Health and Safety
- Fleet Renewal
- Underground Workshop Stores
- Fleet Conditions Assessment
- Equip and Commission 93L Workshop
Fleet
- Rail Bound Equipment Proximity Management System
- Twin Shaft Skip Loading Facility Rehabilitation
Infrastructure
- Footwall Ripping to Hanging wall Ripping
- Basic Equipment Appreciation
Mining
- High Profile destress Stoping
- South Deep Rebase Project
- Regional Pillar Layout
- VCR Economic Potential
Mineral Resource Management
- Improve Business Analyses and Reporting
Financial and Administration
Key projects completed:
South Deep Reabse Plan, 9 March 2017
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Skills and fleet
South Deep Reabse Plan, 9 March 2017
Description 2017 2018 2019 2020 2021 2022 Management 22 23 23 23 23 23 Core 4 291 4 142 4 081 4 058 4 023 4 028 Services 1 262 1 276 1 212 1 212 1 212 1 212 SLP 574 574 574 574 574 574 Total 6 149 6 015 5 890 5 867 5 832 5 837
Full skills and fleet complement in place
Description 2017 2018 2019 2020 2021 2022 Category 1 108 111 106 105 100 95 Category 2 91 91 91 91 91 91 Total 199 202 197 196 191 186
Trackless fleet schedule Critical skills
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Positive operating trends achieved
Setting a solid foundation
South Deep Reabse Plan, 9 March 2017
- 100
200 300 400 500 600 700
2014 2015 2016
metres
Development - monthly average
Development Linear (Development)
- 5,000
10,000 15,000 20,000 25,000 30,000 35,000 2014 2015 2016 m3
Backfill Placed - monthly average
Backfill Linear (Backfill )
- 10,000
20,000 30,000 40,000 50,000 60,000 70,000 2014 2015 2016 tonnes
Longhole Stoping - monthly average
LHS Linear (LHS) 20% 69%
- 500
1,000 1,500 2,000 2,500 3,000
2014 2015 2016
m2
Destress - monthly average
Low Profile High Profile
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- No compromise on safety and health
- Infrastructure maintenance and renewal
- Safe mining methods (mechanisation & automation, seismic controls, safe design)
- Secondary support capacity designed to match requirement
Safety and Health
- Geology block model updates, Geotechnical, Seismic Hazard Analyses
- Mining methods validated
- Mining system capacity analyses
- Infrastructure capacity
- Independent reviews (Gold Fields Technical, GRB, Consulting firms)
Technical Assurance
- Drive towards positive cash flow build up
- Increase operating margins with volume growth
- Capital expenditure efficiency
- Apply technological advancements for increased efficiency
- Sustainability
Profitability
- Full SLP compliance (targets aligned to operational status)
- Full environmental compliance
- Continued support for LED and Joint Alliance projects
- Community relations key priority
Social Licence
Sustainability and profitability
Rebase Plan strategy and objectives
South Deep Reabse Plan, 9 March 2017
Orebody, mine design and geotechnical considerations
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A world class orebody
South Deep Reabse Plan, 9 March 2017
Ramp-up profile only incorporates Current Mine and North of Wrench
SoW-W SoW-E NoW CM
VCR
610 m 1,420 m 1,490 m 980 m
- Corridors increased from 4 to 6 based on
regional pillar changes
- 240m horizontal destress span decreased to
180m
- Converted from low (2.2m) to high (5.5m)
profile destress stoping. Increased yield pillar width from 2.5m (low profile) to 6.0m (high profile)
- Introduced rib pillar design (8 x 20m)
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A world class ore body
slot Corridor progression 3 active cuts 40 – 60 kt/month
High Profile Destress & Longhole Stoping
slot slot slot slot Development Twin Footwall Cross Cut Drain Hole Shaft Stope Access & Infrastructure Cut 1 : Mature Cut 2 : LHS Starts Cut 3 : Destress Starts Return Ventilation Pass Intake Ventilation Pass Ore Pass
South Deep Reabse Plan, 9 March 2017
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Capital infrastructure
Capital Development - 2016 - 2022
2017 2018 2019 2020 2021 2022
2W Main Crusher Feeds rock to 100 level and 105 level conveyers 4W Main Crusher Feeds 105 level conveyor Corridor 2A Cross Cut Development 100-1A and 1B Cross Cut Development Corridor 4 Cross Cut Development Corridor 3 Cross Cut Development Corridor 2B Cross Cut Development 105 level conveyor 100 level conveyor 95 level 93 level Twin Shaft South Shaft 93 Level access to 1W (2018)
- Return air ways
- Access to 93 level workshop
100 level workshop
South Deep Reabse Plan, 9 March 2017
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Geotechnical considerations: Seismicity
- 20,000
40,000 60,000 80,000 100,000 120,000 50 100 150 200 250
Jan'11 Mar'11 May'11 Jul'11 Sep'11 Nov'11 Jan'12 Mar'12 May'12 Jul'12 Sep'12 Nov'12 Jan'13 Mar'13 May'13 Jul'13 Sep'13 Nov'13 Jan'14 Mar'14 May'14 Jul'14 Sep'14 Nov'14 Jan'15 Mar'15 May'15 Jul'15 Sep'15 Nov'15 Jan'16 Mar'16 May'16 Jul'16 Sep'16 Nov'16 tonnes Seismic Energy (MJ)
Seismicity (Energy) vs Production
Seismic Energy (MJ) Destress (tons) Massive (tons)
Crush pillars in LP Destress Stopped for secondary support All HP Destress Combined LP & HP
- 10,000
20,000 30,000 40,000 50,000 60,000 20 40 60 80 100 120 140
Jan'11 Mar'11 May'11 Jul'11 Sep'11 Nov'11 Jan'12 Mar'12 May'12 Jul'12 Sep'12 Nov'12 Jan'13 Mar'13 May'13 Jul'13 Sep'13 Nov'13 Jan'14 Mar'14 May'14 Jul'14 Sep'14 Nov'14 Jan'15 Mar'15 May'15 Jul'15 Sep'15 Nov'15 Jan'16 Mar'16 May'16 Jul'16 Sep'16 Nov'16 Destress (tonnes)
- No. of Events
Seismicity (Events) vs Destress Production
- No. of Events
Destress (tons)
Crush pillars in LP Destress Stopped for secondary support All HP Destress Combined LP & HP
Strong correlation with destress stoping volumes Lower energy release rates (potency) due to improved mining methods (increased regional stiffness)
South Deep Reabse Plan, 9 March 2017
Mine planning and production profile
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Mine planning
South Deep Reabse Plan, 9 March 2017
Ramp-up in LHS will drive future production
56 49 53 47 64 43 41 24 24 39 35 33 31 33 64 80 82 110 113 150 160 50 100 150 200 250 2016 2017 2018 2019 2020 2021 2022
kt/mth
Development Destress Stoping 153 174 Longhole Stoping 47% 8 Rigs 26 Stopes 57% 9 Rigs 26 Stopes 54% 9 Rigs 30 Stopes 67% 11 Rigs 35 Stopes 68% 12 Rigs 35 Stopes 52% 8 Rigs 19 Stopes 44% 6 Rigs 15 Stopes 144 235 224 210 192
Production ramp-up achieved through:
- Increased contribution from longhole stoping
- Increased mining footprint (increase in number of available faces/stopes)
- Increased productivity
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LoM tonnage profile: Average tonnes per month
South Deep Reabse Plan, 9 March 2017
70 years of steady state mining
5 10 15 20 25 30 50 100 150 200 250 300 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056 2058 2060 2062 2064 2066 2068 2070 2072 2074 2076 2078 2080 2082 2084 2086 2088 2090 2092 2094
Au Production (t) Ore Production (kt/mth)
Current Mine NoW SoW East 80kt/mth SoW West 150 kt/mth t Au Steady state from Current Mine and North of Wrench 2022 ≈ 10 years South of Wrench (East and West) Destress starts in 2033 ≈ 63 years
230
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Production profile: Tonnes and ounces
Steady build-up to full production
- 2016 saw a step change in production as the base was reset
- Production build up will be much steadier over the next six years as South Deep approaches full
production
- Mining from North of Wrench increases from 36% to 73% at full production
- At steady state:
̵ Production = 15.5t (500koz) ̵ AIC = R400,000/kg (US$900/oz) South Deep Reabse Plan, 9 March 2017
36% 46% 64% 68% 75% 69% 73% 64% 54% 36% 32% 25% 31% 27% 2 4 6 8 10 12 14 16 50 100 150 200 250 2016 2017 2018 2019 2020 2021 2022 Tonnes Ktpm
Production profile
North of Wrench Current mine Annual production (rhs) 1 2 3 4 5 6 50 100 150 200 250 300 350 400 450 500 2016 2017 2018 2019 2020 2021 2022 g/t koz
Ounces produced vs. recovered grade
Annual production Recovered grade
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Cost and capital profiles
South Deep Reabse Plan, 9 March 2017
Most of the capital is sunk
200 400 600 800 1000 1200 1400 1600 1800 2000 2016 2017 2018 2019 2020 2021 2022 Rm
South Deep capital profile
Sustaining capex Growth capex 200 400 600 800 1000 1200 1400 100,000 200,000 300,000 400,000 500,000 600,000 700,000 2016 2017 2018 2019 2020 2021 2022
AIC: R/kg and US$/oz
R/kg US$/oz (rhs)
- Most of the operating expenditure is in the cost base
̵ 70% - 80% of South Deep’s cost base is fixed
- Significant improvement in unit costs as volumes ramp up
- Total growth capital of R2,280m will be spent over the next six years – mainly on underground
infrastructure (R1,044m) and follow-on development (R724m)
Executive summary and risks
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Executive summary (in 2017 money terms)
Long Term Guide
1. Gold production remains at circa 500koz per annum from 2023 to 2031 and thereafter reduces to circa 480 koz per annum due to a reduction in grade. 2. Operating costs remains at circa R4.5bn per annum after 2022. 3. Sustaining capex reduces from R1b in 2022 to circa R800m per annum from 2026
- nwards.
4. Growth capex increase steadily from R250m in 2022 to R880m in 2027 to account for South of Wrench expenditure, and thereafter steadily reduces to R200m per annum in 2040. 5. South of Wrench capex commences in 2024 and escalates to a peak of R600m in 2031 before dropping off. 6. All in Costs remain below US$900/oz after 2022 and reduce to US$800/oz from 2044.
Description Unit 2016 2017 2018 2019 2020 2021 2022 Tonnes Milled kt 2 249 2 452 2 868 2 733 2 687 2 766 2 861 Underground Reef kt 1 634 1 829 2 085 2 300 2 518 2 691 2 815 Underground Waste kt 107 56 182 183 168 75 46 Surface kt 508 567 600 250
- Recovered Grade
g/t 4.02 4.00 3.88 4.47 5.10 5.56 5.40 Underground g/t 5.16 5.17 4.89 4.91 5.10 5.56 5.40 Surface g/t 0.08 0.08 0.08 0.08
- Gold Produced
kg 9 032 9 800 11 136 12 224 13 698 15 385 15 454 Ounces Produced koz 290 315 358 393 440 495 497 All-In-Cost Rm 5 248 5 734 6 325 6 736 6 428 6 425 6 217 Operating Cost Rm 4 003 4 296 4 650 4 685 4 736 4 755 4 790 Capital Expenditure Rm 1 145 1 291 1 559 1 952 1 590 1 562 1 318 Other Cost Rm 101 147 115 99 103 108 108 All-In-Cost R/kg 583 059 585 129 567 910 551 004 469 273 417 647 402 273 All-In-Cost US$/oz 1 234 1 280 1 240 1 195 1 020 905 875 Operating Expenditure Rm 4 003 4 296 4 650 4 685 4 736 4 755 4 790 Labour Rm 1 872 2 060 2 254 2 227 2 239 2 217 2 220 Stores Rm 896 971 1 034 1 068 1 092 1 120 1 145 Outsourced Services Rm 382 384 298 293 293 292 292 Utilities Rm 436 513 547 577 590 600 608 Other Rm 417 369 516 519 522 524 525 Capital Expenditure Rm 1 145 1 291 1 559 1 952 1 590 1 562 1 318 Sustaining Capex Rm 1 030 1 004 1 135 1 370 1 237 1 289 1 066 Growth Capex Rm 115 287 424 582 353 274 253
South Deep Reabse Plan, 9 March 2017
Investor Relations Contacts Media Contact
Avishkar Nagaser Tel: +27 11 562 9775 Mobile: +27 82 312 8692 E-mail: Avishkar.Nagaser@goldfields.co.za Sven Lunsche Tel: +27 11 562 9763 Mobile: +27 83 260 9279 E-mail: Sven.Lunsche@goldfields.co.za Thomas Mengel Tel: +27 11 562 9849 Mobile: +27 72 493 5170 E-mail: Thomas.Mengel@goldfields.co.za