GOLD FIELDS - Agnew Gold Mine
Review of International Operations
Agnew Gold Mine
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| PRODUCTION: 6,336 kg (203,700 ozs) TOTAL CASH COSTS: R104,040/kg (US$445/oz) |
Latest information
Overview
Location: Agnew is located 23 km west of the town of Leinster in Western Australia, approximately 375 km north of Kalgoorlie and 1,050 km (by road) northeast of Perth at latitude 27°55`S and longitude 120°42`E. The nearest major settlement is the town of Leonora situated 128 km to the south. The mine is served by a network of sealed roads and an all weather airstrip at Leinster. Infrastructure: Ore is currently mined from one open pit, Songvang, and from the Kim and Main ore bodies (comprising the Waroonga underground mining complex) and processed through one CIP plant Geology: Structurally controlled hydrothermal gold deposits situated in the Norseman-Wiluna Greenstone Belt, which is part of the Yilgarn Craton, a 2.6 Ga granite-greenstone terrain in Western Australia. Employees in service: 114 permanent employees, 298 contractors
Agnew Gold Mine
| 2008 | 2007 | 2006 | |||||||
| Open pit mining | |||||||||
| Waste mined | ’000t | 191 | 9,315 | 13,836 | |||||
| Ore mined | ’000t | 202 | 1,532 | 863 | |||||
| Head grade | g/t | 3.24 | 2.58 | 2.13 | |||||
| Strip ratio | W:O | 0.95 | 6.08 | 16.04 | |||||
| Underground mining | |||||||||
| Ore mined | ’000t | 505 | 394 | 452 | |||||
| Head grade | g/t | 9.34 | 11.69 | 12.10 | |||||
| Processing | |||||||||
| Tons milled | ’000t | 1,315 | 1,323 | 1,323 | |||||
| Yield | g/t | 4.8 | 5.0 | 5.2 | |||||
| Gold produced | kg | 6,336 | 6,605 | 6,916 | |||||
| ’000oz | 204 | 212 | 222 | ||||||
| Total cash costs | A$/oz | 496 | 377 | 355 | |||||
| US$/oz | 445 | 295 | 266 | ||||||
| R/kg | 104,040 | 68,403 | 54,656 | ||||||
| Notional cash expenditure | US$/oz | 568 | 473 | 358 | |||||
| R/kg | 132,734 | 109,402 | 73,614 | ||||||
| Capital expenditure | Rm | 241.0 | 205.7 | 117,7 | |||||
| US$m | 33.1 | 28.6 | 18,4 |
Cyanide management at Agnew Gold Mine
Cyanide Management at Agnew Gold Mine (A3 Poster) (281 KB)
Cyanide reporting update (37 KB)
Safety, health and environment
Agnew was LTI free for F2008, achieving 635 consecutive lost day injury free days. It also remained fatality free since acquisition.
The mine maintained certification for AS4801:2000 Occupational Safety and Health Management System, and ISO14001:2004 Environmental Management Standard.
Significant progress was made in capping the top of the southern half of the completed Tailings Storage Facility 2. The Songvang waste rock dump and open pit were largely rehabilitated by year end.
Operational performance
Gold production for the year declined due to a reduction in open pit ore tons. Underground production increased by 28 per cent which provided the base load of mill feed. The Songvang open pit was successfully completed in August 2007 and the mining fleet demobilised. The Songvang ore stockpiles were blended with underground and will be depleted in 2009.
Mining at Waroonga started slowly in F2008 on the back of the issues experienced throughout the course of F2007, but exceeded budgeted levels by the end of the year. Ore drive rehabilitation at Kim South Lode was completed and many of the old secondary stopes from the previous mining method were mined and paste filled.
Whilst the overall performance of Main Lode exceeded F2007 production by 93 per cent, the mining sequence was modified extensively and stope production put on hold to facilitate development to access the orebody to enable optimal stope sequencing. This extended the orebody strike length on multiple levels.
Development to the Rajah Lode started on a number of levels to provide alternative blending sources for Kim.
The paste fill plant at Waroonga performed to expectations. This plant was changed out for a new custom build paste fill plant to achieve better product control.
Total gold production for F2008 was 204,000 ounces, which was 4 per cent down on the previous year’s 212,000 ounces.
Operating costs were steady year-on-year at A$92 million (US$83 million). The Byrnecut underground mining contract was renegotiated for three years. The reduction in mining volume with the completion of Songvang open pit resulted in a net saving of A$8 million in mining related costs. This was offset by an increase in processing costs of A$4 million and on-site overheads of A$3 million.
A new accommodation agreement was entered into as of 1 January 2008 with BHP Billiton who own the town of Leinster which provides accommodation for the mine work force.
Total cash costs for the year averaged A$496 per ounce (US$445 per ounce), compared with A$377 per ounce (US$295 per ounce) achieved in F2007. The increased costs were due predominantly to the increased Byrnecut underground mining costs, processing costs and on-site overheads outlined above.
Capital costs were marginally higher at A$37 million (US$33 million) in F2008 versus A$36 million (US$29 million) in F2007. Mining related capital was down by A$12 million with the completion of the Songvang pit, however each of extensional exploration, additional exploration and capital works were A$4 million higher year-on-year.
Extensional exploration at Waroonga included down-dip extensions to the high grade Kim South resource and the commencement of drilling into the 450 South resource which sits south of the Main Lode orebody. An exploration drive was done for Claudius to evaluate the ore resource against the model. This project was considered marginal and the ore development and subsequent processing proved this to be the case.
Heritage surveys (land access) for exploration activities continued to exceed expectations and the operation was well placed in terms of being able to fulfil planned exploration activities with drilling focused on three main areas by year end: Vivien Gem, Turret North and Cinderella. An additional A$1 million was spent on land access with various site studies to enable exploration activities to proceed where heritage approvals were required.
NCE was steady year-on-year with A$129 million (US$116 million) versus A$128 million (US$101 million) in F2007. On a per ounce basis, there was a 5 per cent increase with A$634 per ounce (US$568 per ounce) versus A$605 per ounce (US$473 per ounce) in F2007, due to the 4 per cent drop in gold sales.
Revenue generated during the year was A$188 million (US$169 million) with an operating cost of A$92 million (US$83 million), realising an operating profit (before amortisation) of A$74 million (US$66 million) for F2008. This compares with the following metrics for F2007: revenue A$174 million (US$137 million); operating costs A$92 million (US$73 million) and operating profit A$81 million (US$64 million).
Labour turnover continued at a very high rate among both staff and contractor workforces. This occurred despite significant improvements in operational performance and is indicative of issues faced in the current resource boom being experienced in Australia.
Outlook for F2009
- Gold production budgeted to reduce to 171,000 ounces.
- The mill will only process underground ore in the second half of the year due to exhaustion of low grade stockpiles.
- Focus on maintaining Waroonga underground production at budgeted rates while continuing with extensional exploration with the aim of growing the resources and reserves base.
- Enhance additional exploration on the lease with a combination of target generation and more advanced project drilling.
- Capital expenditure planned at A$38 million (US$34 million)
largely:
o Infrastructure up-grades in the mill, Waroonga underground declined development, cyanide code compliance and general utilities.
o A$17 million for extensional and additional exploration.