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

Client
Gold Fields.

Project Description
South Deep is a fully mechanised underground mine, extracting a wide multiple band reef at depths between of 2 500 m and 3 000 m below surface. The extraction of such deep-level, wide reefs have not been totally mechanised elsewhere in the world. The production methods used at the mine are, therefore, unique and differ markedly from the labour-intensive mining method traditionally applied in underground mines in South Africa.

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 370 000 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.

From 2010 to 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.

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
Capital expenditure decreased from R2.56-billion in 2012 to R1.96-billion in 2013, in line with increased focus on capital optimisation and scheduling. Most of the expenditure was spent on development, the maintenance of critical infrastructure and equipment, trackless equipment and the full plant tailings backfill.

Duration
South Deep’s production build-up is expected to reach a run rate of between 300 000 and 330 000 reef tonnes a month by the end of 2017.

Latest Developments
South Deep is still largely in project mode and continues its build-up to full commercial levels of production.

South Deep is continuing the process of right-sizing the cost-base in line with the mine’s production profile. The aim is to create a more cost-effective and fit-for-purpose structure by reducing senior management levels, replacing contractors with its own employees, where practical, and optimising all support-service costs without impeding the trackless mechanised mining and ancillary engineering capabilities critical to the momentum of the build-up.

The comprehensive project review, announced in August 2013, has been concluded and, based on the progress made to date and a reassessment of the key inputs into the future mine production schedule, a revised production build-up schedule has been determined. The South Deep production build-up is expected to reach a run rate by the end of 2017, producing between 650 000 oz and 700 000 oz of gold on an annualised basis at an all-in cost of about $900/oz, assuming an exchange rate of $1.00/R9.50 in present-day money terms.

Critical factors that are being addressed to underpin the build-up include:
• ore handling infrastructure – Phase 1 of the silo system was completed in 2013, with Phase 2 planned to be completed in 2014;
• Fleet availability and utilisation; and
• Operator and technician skills.

A new mechanised centre was opened in early 2013 and has world-class equipment to ensure employees are trained to operate at the highest levels possible in the mechanised mining environment. It can accommodate 60 people a day and has four lecture rooms.

Meanwhile, during 2013, South Deep continued its positive build-up trajectory, with gold production improving by 12% from 270 000 oz in 2012 to 302 100 oz in 2013, and the mission critical destress mining increasing by 24% to 53 700 m2 in 2013, which is double the run-rate of two years ago. These improvements are in line with the guidance provided for 2013.

In the quarter ended December 31, 2013, total tonnes milled decreased by 5% from 609 000 t to 578 000 t, owing to the continuing focus on cleaning the long hole stopes. This and seismicity resulted in reduced drifting and development metres and associated reef tonnes.

Underground reef yield increased by 8% from 4.96 g/t to 5.38 g/t, owing to the cleaning of the high-grade 95 2W and 95 3W long-hole stopes, partially offset by a lower grade in the 95 1W long-hole stopes.

Development decreased by 24% from 2 988 m in the September quarter of 2013 to 2 263 m in the December quarter of the same year, mainly owing to the transitional arrangements, with respect to moving from contractor development to owner development. The new mine capital development in Phase 1, sub 95 level, decreased from 610 m to 228 m. Vertical development decreased from 132 m to 122 m. Development in the current mine areas above 95 level decreased from 2 246 m to 1 912 m. Development areas in 95 2W and above 95 level were negatively affected by seismicity during the December quarter.

Destress mining decreased by 3% from 14 986 m2 in the September quarter to 14 504 m2 in the December quarter.

Key Contracts and Suppliers
Redpath (backfill piping, battrice panel installation and the replacement of South Shaft steelwork); Newrack (secondary support); TWP (metallurgical plant design); AEL Mining Services (supply of explosives for blasting) Altlas Copco and Sandvik (suppliers of HME and spares).

Previous contractors and suppliers:
Murray & Roberts Cementation (mine development and shaft deepening); Wilson Bayley Holmes-Ovcon (WBHO) and Wade Walker (tailings dam); MM&G (steelwork fabrication); Steel Services and Allied Industries, Hatch and Cadhouse Design Enterprises (ventilation shaft headgear); Howden Africa (commissioning of main surface ventilation fans); and Sarens South Africa and Crane Corporation (overhead crane for the ventilation shaft headgear).

On Budget and on Time?
The project is on budget but, the roll-out to steady-state production of 650 000 oz to 700 000 oz has been postponed by a year to the end of 2017.

Contact Details for Project Information
Gold Fields VP corporate affairs Sven Lunsche, tel +27 11 562 9763 or email media@goldfields.co.za.
Redpath, tel +27 11 974 2051.
TWP, tel +27 11 218 3000, fax +27 11 218 3100 or email twpinfo@twp.co.za.
AEL Mining Services, tel  +27 11 606 0000.
Altlas Copco, tel +27 11 821 9000.
Sandvik, tel +27 11 929 5300.

Previous contractors and suppliers:
Murray & Roberts Cementation, tel +27 11 201 5000.
MM&G, tel +27 11 914 4740.
Wade Walker, tel +27 11 466 0377.
WBHO, tel +27 11 321 7200, fax +27 11 887 4364 or email wbho@wbho.co.za.
Steel Services and Allied Industries, tel +27 18 787 2059 or fax +27 18 787 3416.
Hatch, tel +27 11 239 5300 or fax +27 11 239 5790.
Cadhouse Design Enterprises, tel + 27 16 429 1643 or email info@cadhouse.co.za.
Howden Africa, tel +27 11 240 4000, fax +27 11 493 0545 or email enquiries@howden.co.za.
Sarens South Africa, tel +27 11 861 3800, fax +27 11 861 3899 or email info@sarenssa.co.za.