Gold Fields: Production impacted by weather and operational challenges

In its Operational update for the quarter ended 31 March 2024, Gold Fields says that its production was impacted by weather-related events and operational challenges, particularly at the Gruyere, St Ives, South Deep and Cerro Corona mines resulting in group attributable equivalent gold production (excluding Asanko) for the quarter being 18% lower year on year (YoY) and 22% lower quarter on quarter (QoQ) to 464koz (Q1 2023: 563koz and Q4 2023: 594koz). The production performance for each of these operations was as follows.

Gruyere

Gruyere attributable gold production at 32.2koz was 22% lower YoY (Q1 2023: 41.3koz) and 14% lower QoQ (Q4 2023: 37.3koz) and was negatively impacted by a significant rainfall event in March 2024, which resulted in the damage and closure of the roads that provide primary access to the mine. The roads were closed from 5 March, limiting deliveries of diesel and consumables to the mine, and consequently mining activity and ore processing temporarily ceased. During this time, the mine proactively brought forward planned plant maintenance. In mid-April, the mine was able to receive fuel and consumables, which were delivered utilising alternative routes via South Australia and the Northern Territory where roads had dried sufficiently to allow access. Mining recommenced on 12 April 2024 and plant processing on 14 April 2024. The primary access road to Gruyere was re-opened on 30 April 2024. Ramp up of mining and plant processing to normalised levels were achieved by 21 April 2024.

Annual gold production guidance for Gruyere remains unchanged at 150.0koz – 167.5koz with the mine expected to make up the production lost in the quarter in the second half of 2024.

St Ives

Gold production at St Ives at 68.9koz was 26% lower YoY (Q1 2023: 92.7koz) and 37% lower QoQ (Q4 2023: 109.4koz) and was negatively impacted by a decrease in ore mined (following the change in bulk stopes  at Invincible as planned) and lower grades. Ore mined from the underground mine reduced to 407kt in the quarter compared to 449kt in Q1 2023 and 570kt in Q4 2023 while the underground grade was 14% lower YoY and 16% lower QoQ. In addition, there was no open pit ore mining at St Ives in Q1 2024 as mining moved to pre-stripping the Invincible Footwall South and Swiftsure open pits, which are expected to commence production of ore during the September 2024 quarter. Gold production for the year is therefore expected to be back-ended to the latter part of the year to achieve the mine’s annual guidance of 355koz, which remains unchanged.

South Deep

The South Deep mine has had a challenging quarter with operational momentum impacted by the fatal incident on 2 January 2024, compounded by reduced stope access owing to increased backfill rehandling and slow drilling through crushed ground resulting in slower stope turnaround in current destress cuts. Gold production for the quarter was 34% lower YoY and 32% lower QoQ at 56.3koz (1,750kg). Backfill rehandling is currently presenting the most impactful  challenge to production. The mine has developed a recovery plan to address this.

South Deep’s attributable gold equivalent production for 2024 is therefore expected to be in the range of 9,500kg – 9,700kg, in line with gold mined in 2023 (which was 9,600kg). The mine’s AISC for 2024 is expected to be higher than initial guidance at US$1,590/oz – US$1,625/oz mainly as a result of the lower production volumes.

With its significant resource endowment and long life, the focus for South Deep is currently on setting the mine up for longevity, quality ounces and incremental and sustainable production increases.

Cerro Corona

Attributable gold equivalent production at Cerro Corona at 41.8koz was 44% lower YoY (Q1 2023: 74.7koz) and 19% lower QoQ (Q4 2023: 51.9koz) impacted by lower gold and copper grades processed and lower metallurgical recoveries, in line with the long-term mining plan. In addition, inclement weather during the quarter affected the stability of the north wall of the pit, resulting in a resequencing of mining to lower- grade areas. The stability of the North wall has been addressed and mining operations have resumed.

Cerro Corona mine is expected to continue mining until 2025 and thereafter will process stockpiles for five years.