The Salares Norte mine in Chile
JSE- and NYSE-listed Gold Fields has revised its group-wide full-year production guidance downward, from between 2.33-million and 2.43-million ounces, to between 2.20-million and 2.30-million ounces, owing to a production revision at its Salares Norte project, in Chile, where production is uncertain owing to winter events.
The production guidance for Salares Norte has been revised down from the previously indicated gold-equivalent ounces range of 220 000 oz to 240 000 oz, to 90 000 oz to 180 000 oz.
As reported in the company’s first-quarter operational update, ramp-up at Salares Norte has been negatively impacted by the early onset of winter events which have persisted in recent weeks.
These weather events resulted in the freezing of material in the piping of the process plant, resulting in the temporary shutdown of the plant.
These impacts have been greater than planned, owing to the early onset and extended duration of winter conditions during the commissioning and ramp-up phase, the company explains.
The plant has been restarted; however, commissioning and ramp-up during the winter period are expected to continue to be challenging, creating uncertainty on production levels during the winter months.
Gold Fields, nevertheless, assures shareholders that the design criteria of the plant will be capable of handling such winter weather events at steady state and that total project capital costs remain in line with guidance of $1.18-billion to $1.2-billion.
Meanwhile, Gold Fields' group-wide all-in cost expectations have also been revised from the $1 600/oz to $1 650/oz range previously guided to $1 675/oz to $1 740/oz.
Also, guidance for all-in sustaining costs has been revised to $1 470/oz to $1 530/oz, compared with the $1 410/oz to $1 460/oz previously guided.
CHINCHILLA CAPTURE, RELOCATION PLAN
On May 17, Gold Fields advised shareholders that Salares Norte had received an urgent and transitionary measure (MUT) from Chile’s Superintendence of Environment (SMA) ordering temporary suspension of the dismantling of Rocky Area No 3 (R3) as part of its approved Chinchilla rescue and relocation plan.
On June 5, Salares Norte received an updated notice from the SMA extending the suspension of dismantling R3 for a further 120 days.
Mining operations and project activities are continuing and the focus remains on ramp-up of the project, respecting the buffer zones established to avoid any potential disturbance to this species and complying with all other regulatory requirements established by the authority, the group says.
As part of the initial MUT issued on May 14, the SMA requested additional information detailing the monitoring activities undertaken at R3.
Salares Norte submitted this information, which included endoscopic probe searches and night camera recordings.
Gold Fields says it continues to engage with the SMA to progress the Chinchilla capture and relocation plan.
In accordance with the approved capture and relocation plan, Gold Fields is not planning to undertake any capture and relocation activities during the winter months at Salares Norte.
The company emphasises that it remains committed to the safe capture and relocation of the protected Chinchilla species and Salares Norte continues to work with the SMA and independent environmental experts on all aspects of this programme.
“Salares Norte remains a high-quality asset that will contribute materially to Gold Fields’ cashflows in future years,” the group states.