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, which was commissioned in November 2012, has also been expanded and has increased processing capacity from 220 000 t/m to 330 000 t/m.

Between 2010 and 2012, the mine completed the construction of the centralised tailings storage facility, developed and installed infrastructure around the shaft systems and also changed to full plant tailings backfill for increased production levels. The backfill plant was commissioned in early 2012.

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 was scheduled to ramp up to 700 000 oz/y by 2016, but this guidance has now been extended. Gold production increased by 23% from 63 000 oz in the March 2013 quarter to 77 800 oz in the June 2013 quarter.

The South Deep operation had a resource of 79-million ounces as at December 31, 2012, and a reserve of 39-million ascertained ounces, which would give the operation a life-of-mine of more than 50 years.

Value
The company will spend about R1.9-billion in 2013.

In the June quarter, capital expenditure increased from R551-million to R571-million, as a result of increased new mine development. The majority of the expenditure was on development, the ventilation shaft deepening and infrastructure projects, the metallurgical plant expansion, trackless equipment, the full plant tailings backfill plant, refrigeration plant upgrades and high-density accommodation.

Duration
A production run-rate of about 700 000 oz/y of gold was expected to be reached from 2016; however, Gold Fields has stated that it is unlikely that the mine will achieve this target, owing to slower than expected build-up in destress mining, despite spite improvements in the mine’s production.

Latest Developments
In the quarter ended June 30, total tonnes milled increased by 23% from 520 000 t to 640 000 t. This included 127 000 t of off-reef development, compared with 83 700 t included in the March quarter. Underground reef yield remained similar at 4.8 g/t.

Development increased by 51% from 2 414 m in the March quarter to 3 653 m in the June quarter. The new mine capital development in Phase 1, sub 95 level, increased from 492 m to 783 m. Vertical development increased from 124 m to 166 m. Development in the current mine areas above 95 level increased from 1 798 m to 2 704 m.

Destress mining increased by 39% from 10 122 m2 in the March quarter to 14 082 m2 in the June quarter. Destress levels improved consistently during the quarter.

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 the 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?
It is unlikely that the mine will achieve its stated target of 700 000 oz of yearly production during 2016, owing to the slower production build-up and with the slower than expected build-up in distress mining.

Further, the underground yield and mine call factor have been negatively impacted on by logistical contraints, which have resulted in a delay in moving the long-hole stoping tonnages from the working place to the shaft.

A comprehensive review is under way to determine the most realistic future production profile for this mine.

Once this is completed a reassessment of the capital and cost base will follow.

Gold Fields believes that a rationalisation of the cost base at South Deep is required because of the lower gold price and that the production build-up is likely to take longer.

Further information on this review process is expected by the end of the year.

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.