Name of the Project
South Deep gold mine expansion.

Location
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 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 ventilation 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 bulk of its surface infrastructure, including the centralised tailings storage facility, developed and installed infrastructure around the shaft systems and changes 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 hoisting capacity to 450 000 t/m.

The South Deep operation had a mineral resource of 63-million ounces as at December 31, 2016, and a mineral reserve of 34-million attributable ounces, which will give the operation a life-of-mine to about 2094.

Jobs to Be Created
Most of the critical skill positions identified at the start of 2016 have now been filled, with a limited number of specialist positions unfilled as yet.

Net Present Value/Internal Rate of Return
Not stated.

Value
An estimated R30-billion has been invested to date.

Duration
The timeline for the roll-out to steady-state production was presented to the board in February 2017. Under the new plan, South Deep has a life-of-mine to 2094.

Latest Developments
The South Deep gold mine achieved several milestones in 2016, as interventions implemented over the past two years started yielding results. Gold Fields will now embark on a new R2.3-billion rebase plan at the mine to create a defensive asset in a spiralling industry.

Equipped with a new long-term build-up plan for South Deep, the next five years will result in the ramp-up to steady-state production of 500,000 oz/y at an all-in cost (AIC) of below $900/oz, with a 70-year life span.

About R2.28-billion in total growth capital will be spent on the mine over the next six years, including R287-million in 2017 and the peak of R582-million in 2019, to bring the mine to steady state by 2021/22. The bulk of this capital is required for underground infrastructure and R724-million for follow-on development. About R104-million is budgeted for electricity, R88-million for vertical development, R66-million for the mine fleet and R58-million for drilling.

Gold Fields CEO Nick Holland has pointed out that most of these items are part of original project capital deferred in 2013.

A lot of work has been done over the past two years, including a thorough diagnostic assessment during 2015 and 2016, which resulted in 68 business improvement projects being identified to create a long-life, sustainable mechanised mine.

Twenty-nine of these projects have been completed. A further 27 will be completed this year and the remaining 12 in 2018.

South Deep has also tackled several challenges surrounding people and skills, fleet and maintenance, underground working conditions and the mining method.

In a turnaround on the mining method, which Holland believes will be the reason the new plan will succeed, several improvements have been made on the overall design and mining layouts and an experienced management team with extensive exposure to mechanised and deep level mining has been established.

South Deep has also instituted a number of key strategies to upgrade the condition of the mechanised equipment fleet and the effectiveness of its maintenance practices, while also working on initiatives to improve various elements of the underground infrastructure, including roadways, water management, backfill and ventilation.

This had delivered a 47% increase in gold production to 290,000 oz in 2016, and improvements in lead indicators, and resulted in achieving beyond the targeted cash breakeven, genera-ting net cash flow of $12-million, compared with an outflow of $80-million in 2015.

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

Previous contractors and suppliers:
Murray & Roberts Cementation (mine development and shaft deepening); Wilson Bayly Holmes-Ovcon (WBHO) and Wade Walker (tailings dam); MM&G (steelwork fabrication); Steel Services & 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.

Contact Details for Project Information
Gold Fields VP Corporate Affairs Sven Lunsche, tel +27 11 562 9763 or email sven.lunsche@goldfields.com.