Gold Fields updates on Salares Norte gold mine

The Salares Norte project was relatively unaffected by the COVID-19 pandemic and largely stuck to the project schedule during H1 2020. At the end of June 2020, engineering progress was 74.7% compared to plan of 76.0% and is on track to be at 100% by the end of the year.

The Salares Norte Project is located in the Atacama region of Northern Chile. The nearest town is Diego de Almagro, about 190km by road to the west of the project. The project is centred on latitude of 26°0’42’ S and longitude of 68°53’35’ W, with elevations between 4,200m and 4,900m amsl.

Phase 1 of the camp construction was 80.8% complete at the end of the end of June 2020 versus plan of 84.3% and is on schedule to be completed during Q3 2020. In addition to the Phase 1 camp construction, various construction activities were initiated during H1 2020, including fabrication of the SAG and Ball mills, which began in May.

The mass earthworks contract was awarded at the end of May and construction of the diversion channels started in June. The mining contract was also awarded during the quarter.

At the end of the June quarter 61% of the project Estimate at Completion (EAC) budget (excluding remaining contingency) had a fixed and firm price (excluding inflation factors) through contracts and purchase orders awarded, significantly reducing the risk of price differences.

In total, 8,458 metres were drilled as part of the District exploration programme during H1 2020 compared to plan of 9,084 metres. The shortfall in exploration metres was due to the fact that drilling activities were stopped at the end of Q1 2020 and the exploration team moved off-site in response to the COVID-19 pandemic.

The plan is to recover the shortfall during Q3 2020.A total of US$44m was spent on the project during H1 2020. In March 2020, a total notional amount of US$544.5m was hedged at a rate of US$/CLP836.45 for the period July 2020 to December 2022.

Gold Fields discovered the mineralisation at Salares Norte in March 2011. To date, 511 holes totalling 142,496m have been drilled on the project (115 reverse circulation holes and 396 diamond drill holes).

The project is owned by Minera Gold Fields Salares Norte Ltda (MGFSNL), which holds 1,800ha of exploitation concessions (mining rights), with definitive title granted. MGFSNL also has an option to purchase agreement for an additional 1,200ha property attached to the project. Gold Fields Limited indirectly holds a 100% interest in MGFSNL. Access rights to the property have been granted by the government and applications for water rights have also been approved.

The Salares Norte Project is located in the northern part of the Maricunga Belt, an area with a predominance of Cenozoic volcanic rocks, comprising eroded strato-volcanos, volcanic domes and pyroclastic rocks.

Mineralisation at Salares Norte is contained in a high-sulphidation epithermal system, hosted mainly by a breccia complex along the contact of two volcanic domes of andesitic and dacitic composition. Mineral Resources have been delineated by drilling in two separate deposits, Brecha Principal and Agua Amarga, which are located about 500m apart. Most of the mineralisation known to date is oxidised. The sulphide mineralisation contains mainly pyrite. Preliminary metallurgical test results indicate gold extraction in the order of 92% using a conventional CIL process on samples of oxidised material.

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