CAPE TOWN (miningweekly.com) – South Africa-based miner Gold Fields has established a strong growth portfolio over the next five years to increase its current gold production base of 3.5-million ounces a year, CEO Nick Holland said at the Investing in Africa Mining Indaba in Cape Town on Tuesday.

“We focus on discovery a lot more than anything else and on providing longevity of our existing operating assets. We are targeting five-million ounces by 2015 – either in production or in development,” he said.

The company has doubled its exploration budget over the last four years. Development projects that have already moved from the initial and advanced drilling stages into resource development were situated in Peru, Mali, Finland and the Philippines.

In the Philippines, Gold Fields is targeting a resource of 52-million ounces. “This is truly one of the premier deposits in the planet that we are very fortunate to have,” said Holland.

Advanced exploration projects were also currently being carried out in Canada, Chile and Mali.

Through these development activities, Gold Fields is actively working towards improving its geographical diversification. Currently, 48% of production is in South Africa, which is a reduction from previous years.

“When I got into the job four years ago, we had around 62% of the production that was out of South Africa and we had a strategy to aggressively change that particular weighting . . . Over the next five years, as the company gradually brings the new development projects into production, we should be able to get our South African base down to about 40%. We think that’s a good, manageable number and a good sustainable number,” said Holland.

Holland commented that diversification has been particularly important, as South African gold production had declined significantly over the last five to ten years as mines went deeper.

“We have been able to do somewhat better than the industry at large over this period, but importantly we have been able to replace the number of ounces that were inevitably going to be lost in South Africa by production from elsewhere, so we can maintain the changing geographical diversification of the portfolio.”

Despite its intentions to diversify geographically, Gold Fields is currently building a new mine at South Deep. The company has committed to spending over $1-billion to bring South Deep to full production of 700 000 oz/y by the end of 2015.

Holland said that significant visible progress has already been made on this project. “This will be a great addition to a gold-mining industry in South Africa that has been declining, and this could help to offset a lot of the decline.”
 

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