Goldfields to deepen Driefontein, Kloof

Gold Fields (GFI-N, GOF-L, GOGOF-J) has announced plans to expand its two largest South African gold mines in a R4.7-billion ($708-million) program to start in the middle of next year.

The Driefontein mine will see an investment of R3.3 billion ($497 million) to deepen the No. 9 inclined shaft to 4,121 metres. It currently goes to 1,988 metres, and the new shaft would be the deepest mine in the world.

The shaft will give Gold Fields access to a reserve of 33 million tonnes grading 8.2 grams gold per tonne on the Witswatersrand Basin’s Carbon Leader Reef. The reserve would extend Driefontein’s mine life out to 2035.

Sinking is planned to start on the shaft in October 2007 and take just over four years to complete; fitting out the shaft should take another year. Production would start in 2014, following drift development, and would reach a plateau of 170,000 tonnes per month in 2019.

At Kloof, Gold Fields has budgeted R1.4 billion ($211 million) for an inclined shaft sinking program that would extend the workings to 4,020 metres. The new workings would open up the Kloof Extension mineralization, whose reserve Gold Fields has pegged at 5 million tonnes grading 12.1 grams per tonne. The mineralization is on the Ventersdorp Contact Reef.

Sinking would start next July and mining would begin in 2009. The Extension project would have a life out to 2021.

Both projects are based on a rand-denominated gold price of R100,000 per kg (US$423 per oz. at present rates of exchange). Feasibility work indicated cash production costs of US$279 per oz. at Driefontein and US$246 per oz. at Kloof.

The deepening program is of a piece with ambitious deep-mining programs at other properties in the Witswatersrand basin. AngloGold Ashanti (AU-N, AGD-L, ANANO-J) has previously discussed plans to develop Western Deep Levels South to 4,000 metres and Western Ultra Deep Levels to 5,000 metres. Currently the deepest of the West Rand shafts, TauTona, goes to 3,500 metres.

DRDGold (DROOY-Q, DRD-J) is at the pre-feasibility study stage on the Argonaut project, which would exploit mineralization down-dip from its East Rand mine down to about 5,000 metres; the current East Rand shaft goes to 3,585 metres.