| Thu 7 Sep 2006, 8:15 | | Gold Fields Limited - Gold Fields to invest R4.7 b |
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Gold Fields Limited - Gold Fields to invest R4.7 billion in South Africa
Gold Fields Limited
Share Code: GFL
ISIN: ZAE000014270
Media release
Gold Fields to Invest R4.7 billion in South Africa
Johannesburg, 7 September 2006: Gold Fields Limited (Gold Fields) (NYSE: GFI;
JSE: GFI) is pleased to announce that it will invest R4.7 billion in the
deepening of the Driefontein and Kloof Gold Mines in South Africa, the Company"s
flagship operations.
These projects will access an additional 10.8 million ounces of gold below the
current infrastructure of the two mines.
Ian Cockerill, Chief Executive Officer of Gold Fields, said:
"South Africa remains one of the premier gold mining destinations in the world.
In global gold mining parlance, South Africa is elephant country!
These investments will extend our South African production profile to at least
2035, strengthening further the solid foundation from which Gold Fields will
continue to pursue its existing commitment to international growth."
Due to Gold Fields" current strong cash flow generation the planned investments
will be funded from internal sources.
Driefontein Gold Mine: 9 Sub-vertical Shaft Depth Extension Project
At the Driefontein Gold Mine the company aims to invest R3.3 billion to deepen
the existing 9 Sub-vertical shaft system from its current depth of 1,988 meters
below datum (43 level) to a final depth of 4,121 meters below datum (58 level),
making it the deepest mine in the world.
This will enable Driefontein to mine an additional 8.8 million ounces of
reserves, contained in a resource of 13.9 million ounces below the existing
infrastructure of the mine, and will extend the life of the mine by at least 13
years to approximately 2035. The project will mine the Single and Multiple Band
Carbon Leader Reef at an average head grade of 8.2 grams per ton.
The project was planned using a long-term gold price of R100,000 per kilogram,
with a break even gold price of R85,360 per kilogram. The life of mine cash
costs for the project will be R65,977 per kilogram, with average working costs
of R543 per ton. The planned capital investment per reserve ounce is US$51 and
the project will deliver a return of 8 per cent.
Shaft sinking will commence in October 2007 and is expected to be completed late
in calendar year 2011, after which it will take a further 12 months to equip the
proposed 200,000 ton per month shaft.
Horizontal development to intersect reef on all seven planned production levels
will be completed by the middle of calendar year 2014. Planned full production
of 170,000 reef tons hoisted per month will be achieved during 2019.
To compensate for the challenges presented by mining at depth, the proven method
of narrow reef mining with closely spaced dip pillars of 40 meters wide and
mining spans of 140 meters, with backfill for in-stope support, will be
employed. The collaborative Deep Mine Research Project conducted by the CSIR and
the major gold producers in South Africa confirmed this as the most appropriate
method for mining at depth.
To achieve productive working conditions in an environment with virgin rock
temperatures exceeding 550 centigrade, the mine will utilise state of the art
cooling technology, including bulk air cooling, chilled service water and ice
technology.
The mine design provides for other innovative technologies such as electric rock
drilling, mechanised development and state of the art communication systems.
Kloof Gold Mine: Kloof Extension Area (KEA) Decline Shaft Project
At the Kloof Gold Mine Gold Fields plans to invest R1.4 billion in the
development of a Decline Shaft System to provide access to the Kloof Extension
Area (KEA). The KEA, which is down dip from the existing Three Sub Vertical
Shaft and North of the existing Four Sub Vertical Shaft, is at an average mining
depth of 3,827 meters below datum and, at its deepest point, will be 4,020
meters below datum, making it the second deepest mine in the world.
This Project will enable Kloof to mine an additional two million ounces of
reserves, contained in a resource of 4.5 million ounces, and will add
incremental gold production to Kloof"s production profile from 2011 to 2021. The
project will mine the Ventersdorp Contact Reef (VCR) below 43 level down to 48
level, at a head grade of 12,1 grams per ton.
The project was planned using a long-term gold price of R100,000 per kilogram
with a break even gold price of R83,137 per kilogram. The life of mine cash
costs for the project will be R58,244 per kilogram, with average working costs
of R864 per ton. The planned capital investment per reserve ounce is US$95 and
the project will deliver a return of 14.6 per cent.
The sinking of the decline shaft will commence in July 2007 with the five
planned production levels coming into production over a 9-year period. The first
reef intersection on 44 Level is expected in the second half of 2009, when the
first gold will be produced from this project. Planned full production of 60,000
reef tons per month will be reached during 2018.
A conventional narrow reef mining method with closely spaced dip pillars of 35
meters wide and mining spans of 110 meters will be used. As at Driefontein,
state of the art cooling technology, electric rock drilling, mechanised
development and communication systems will be utilised.
To minimise travelling time to and from working places, the transportation of
personnel will be by means of a chairlift system, separated from the
transportation of rock and materials in the decline.
The project is being designed to accommodate a possible extension to below 48
level, where the potential exist for additional reserves.
Gold Fields is one of the world"s largest unhedged gold producers, with annual
gold production of approximately 4.2 million ounces from mines in South Africa,
Ghana, Australia and Venezuela, as well as a developing mine at Cerro Corona in
Peru. The Company has ore reserves of 65 million ounces and mineral resources of
179 million ounces. Gold Fields has its primary listing on the Johannesburg
Securities Exchange and secondary listings on the NYSE, LSE, Euronext in Paris
and Brussels, and on the Swiss Exchange. All of Gold Fields" operations are ISO
14001 certified.
Ends
7 September 2006
Date: 07/09/2006 08:15:43 AM Produced by the JSE SENS Department
