Toronto/Johannesburg - Gold Fields’ South Deep mine will be smaller than initially planned for at least the next three years as the company focuses on keeping it profitable, Chief Executive Officer Nick Holland said on Tuesday.
Last year, the Johannesburg-based company dropped a target for South Deep to produce 650 000 ounces to 700 000 ounces by 2017 after years of technical problems.
“Initially, in the first three to five years, that will not be realistic as a target,” Holland said in an interview during the Denver Gold Forum in Colorado Springs. “After many years, it may well be achieved.”
South Deep, Gold Fields’s sole mine in its home country of South Africa, is the world’s largest gold deposit after Grasberg in Indonesia and makes up about three quarters of the company’s reserves. The complexity of the ore formation, its depth, and operational and safety problems have mired the mine in delays throughout its 25-year lifespan, during which it has been owned by JCI, Western Areas and Barrick Gold.
The 700 000-ounce a year plan “is a long-term aspiration, but we’ve said for now we’re going to take those targets off the table”, Holland said. The company will publish a five-year plan for the asset in February.
South Deep generated positive cash flow last quarter for the first time since the company bought the operation for about $3 billion in 2006, Gold Fields said in August.
* With assistance from Millie Munshi
BLOOMBERG