Name and Location
South Deep gold mine expansion, Gauteng, South Africa.

Client
Gold Fields.

Project Description
The project comprises a main shaft and a ventilation shaft – collectively referred to as the Twin Shaft complex, which will have a combined hoisting capacity of 330 000 t/m of ore.

The main shaft was completed in 2004 and comprises a single drop to a depth of 2 995 m.

The ventilation shaft has been deepened from 2 760 m to about 2 950 m and is fully equipped, with ore-storage silos and conveyor belts at shaft bottom, a new rock winder and new headgear.

The mine’s headgear at the vent shaft was completed in 2011, using one of the largest fabricated steel headgear frames in the world.

The South Deep metallurgical plant has also been expanded. This will increase processing capacity from 220 000 t/m to 330 000 t/m.

During 2011, the mine also completed construction of the centralised tailings storage facility, developed and installed infrastructure around the shaft systems and changed to full plant tailings backfill for increased production levels.

The South Shaft complex will add an additional 120 000 t/m of hoisting capacity to the mine, bringing the total combined hoisting capacity to 450 000 t/m.

Gold production is set to ramp up to 700 000 oz/y by 2016. During the December 2012 quarter South Deep produced 62 700 oz of gold, increasing the total for the full 2012 year to 270 000 oz. Production is expected to improve by between 10% and 15 % during 2013.

The South Deep operation had a resource of 81.4-million ounces as at December 31, 2011, and a reserve of 39.6-million ascertained ounces, which would give the operation a life-of-mine of more than 50 years.

Value
The company spent R2.5-billion in 2012 and will spend R1.9-billion in 2013.

In 2014, capital expenditure is expected to drop to R1.5-billion, after which the operation will be in steady state.

To date, the gold miner has invested R36-billion in South Deep.

Duration
A production run-rate of about 700 000 oz/y of gold is expected to be reached from 2016.

Latest Developments
Three significant milestones in support of the build-up to a production run-rate of 700 000 oz/y by the end of 2015 were reached in the quarter ended December 31, 2012.

The first was the completion, within budget and on time, of South Deep’s new ventilation shaft. The ventilation shaft-deepening project hoisted the first rock in mid-October and the shaft, the new headgear and surface conveyors were commissioned by the end of December, as planned. The commissioning process at the shaft has already started.

The additional rock-hoisting capacity provided by this shaft is planned to ramp up to a nameplate capacity of 195 000 t/m by December 2013, which, combined with the 175 000 t capacity of the existing Main shaft, will be sufficient to sustain a full-production mill feed of 330 000 t/m. This hoisting capacity will be available two years ahead of full production. During this production build-up period, the underground infrastructure of truck tips and ore passes, crushers, conveyors and the shaft silos will be constructed and commissioned in phases.

The second milestone was the completion and commissioning of the gold plant expansion, which increased South Deep’s plant capacity from 220 000 t/m to 330 000 t/m. The gold plant expansion was commissioned a month ahead of schedule in November, three years ahead of the full production processing requirement.

The third major milestone was the conclusion of a landmark agreement with the National Union of Mineworkers (NUM), introducing a new operating model for the mine. The implementation process has started and is well under way and has resulted in the recruitment of about 400 additional employees. The essence of the agreement is the introduction of a new 24/7/365 operational schedule, which is in line with best practice mechanised underground operations world-wide.

This model is expected to provide an additional 30% face time and help achieve further productivity improvements. The new operating model includes, inter alia, more competitive grading, remuneration and targeted incentives,

With the the full calendar operation (Fulco), Gold Fields hopes to elevate South Deep's performance, in the tall orebody, to global best-practice levels. Gold Fields CEO Nick Holland expects the full benefits of Fulco to come into effect in May.

The new agreement, which cost South Deep R170-million in advance, is expected to define the mine’s future as a modern producer, with a bonus system that links employees with business objectives.

The advantage of the agreement is that South Deep will benefit from five more working hours a day – a 25% improvement on productivity – and seven more production days a year, while employees will, on average, have 50 fewer working days a year.

Underground operational personnel in specific job categories have agreed to revert to a new shift rotation structure of four days on, four days off, four nights on, four nights off, referred to as 4x4.

The current Christmas-breaks agreement has been replaced, as the mine will shut down for eight days on December 23 each year, providing an effective 12-day Christmas break for each Fulco employee.

A comprehensive fatigue management system will be introduced to provide for a one-hour midshift food-and-drinks break, in addition to the food and drinks given out at the start of the shift.

The existing bonus schemes for underground employees are being replaced by a new, uncapped productivity-linked bonus scheme that will provide incentives for improved performance.

An independent expert has been appointed to verify a new grading system, which will take into account the nature of the work performed and create appropriate career paths.

Key Contracts and Suppliers
Murray & Roberts Cementation (mine development and shaft deepening); Wilson Bayley Holmes-Ovcon (WBHO) and Wade Walker (tailings dam); Redpath (battrice panel installation and replacement of South Shaft steelwork); MM&G (steelwork fabrication); Steel Services and Allied Industries, Hatch and Cadhouse Detailers (ventilation shaft headgear); Newrack (secondary support); TWP (metallurgical plant design) Howden (commissioning of main surface ventilation fans): AEL Mining Services (blasting contract to deepen ventilation shaft); and Sarens South Africa and Crane Corporation (overhead crane for the ventilation shaft headgear).

On Budget and on Time?
Yes.

Contact Details for Project Information
Gold Fields VP corporate affairs Sven Lunsche, tel +27 11 562 9763 or email media@goldfields.co.za.
Murray & Roberts Cementation, Mike Wells, tel +27 11 201 5000.
Civcon, Lex Henning, tel +27 11 206 9660.
Redpath, Gert Roets, tel +27 11 974 2051.
MM&G, Mike Dos Santos, tel +27 11 914 4740.
AEL Mining Services, tel +27 11 606 0000 or fax +27 11 605 0000.
Wade Walker, Tim Wakefield, tel +27 11 466 0377.