International gold producer Gold Fields South Deep mine, the only South African asset in the company's portfolio, is starting to reap the benefits of ‘going back to basics’.

Production from the mine for Q2, 2015 was 7% higher that Q1, 2015, at approximately 1 203 kg, despite numerous safety related stoppages.

After a difficult 2014 and the introduction of a new management team, Gold Fields took the decision at the start of 2015 to take a step back and ‘get the basics right' at South Deep to ensure a stronger foundation for sustainable growth in the future.

The first six months of the year have come with its own challenges as the new management team has adopted a strategy of embedding an improved safety and productivity culture as it sets the mine up for the long-term. Despite this, production improved from Q1.

Importantly, “we are starting to see some positive trends with momentum in key mining metrics increasing in June and July,” says the company, reporting on its quarter two financial results (to June 2015).

While Gold Fields has reduced its 2015 production target for South Deep to approximately 6 500 kg, it maintains its aspiration of achieving cash breakeven by the end of 2016. The improvement in production in the second half of 2015 is expected to be driven by an increase in the contribution from large volume long hole stoping and the introduction of new fleet, which was already factored into the capital forecast at approximately R1billion for the year.

The new fleet will increase the complement of category I equipment (rigs, loaders and trucks) by a third. These new additions will meaningfully increase equipment availabilities.

“We have previously said that 2015 at South Deep is more about the inputs than the outputs and have undertaken to provide a ‘progress report' on the inputs. In broad terms, we have identified three focus areas at South Deep: people, fleet and mining method.

People

To augment the current skills base, Gold Fields has identified the need for an additional 160 skilled employees across all levels including front-line supervision, with approximately 75% having been recruited by the end of June.

Most of the remaining hires are on the engineering side and the company expects to have the majority in place by the end of this year. The other positive development on the labour front was the signing of the three-year wage deal until March 2018, as previously reported, which should give South Deep a degree of stability as the mine builds up.

Fleet

A review of the fleet at the mine necessitated the acquisition of an additional 27 pieces of category I equipment, in addition to the 75 pieces in service, of which seven are to be scrapped. The majority of the new equipment (approximately 85%) is expected to be operational by the end of Q3, 2015, with the remainder planned before year-end.

Maintenance continues to be the bottleneck impacting the availability of the fleet, with a comprehensive planned maintenance strategy being developed. During Q2, 2015, Gold Fields took the decision to outsource the maintenance of the fleet in corridor 2 to Sandvik (the equipment manufacturer).

This will be fully implemented by November 2015 and should provide much needed skills transfer. Approximately 35% of ore production is sourced from this corridor. In addition, the new 93-level workshop, with improved facilities and excess capacity, is expected to be fully operational for the 2 west and 3 west corridors by end-October 2015.

Mining method

The complexity and interdependence of the various elements of the mining method should not be underestimated, however, progress is being made on the different components.

  • De-stress mining – one of the key constraints to de-stress mining has been support installation. At the end of June, eight additional support crews were deployed, which should debottleneck constraints in de-stress mining leading to a better last six months in 2015.
  • Ripping/sliping of de-stress ends – a trial to convert footwall ripping to hanging wall ripping in order to improve efficiencies is expected to conclude in Q3, 2015.
  • Secondary support – introduction of dedicated crews responsible for secondary support installation and moving from only day shift to both day and night shifts as well as a change in the shift roster (an additional eight shifts per month). In addition, the number of rigs has increased from five in June to eight in August. All of these changes are planned to result in an increase in the rate of support installation.
  • Backfill – backfill production increased from approximately 40 000 tpm t the start of the March 2015 quarter to approximately 80 000 tpm towards the end of the June 2015 quarter which was the highest seen in 24 months. This was achieved through the commissioning of the Full Plant Tailings (FPT) backfill plant. This situation will be further improved through the conversion from mechanical to hydraulic mining of surface tailings which is expected to commence at the end of August. The mining of surface tailings is profitable and is a source of additional backfill until underground volumes increase.

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