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December 28, 2023
Gold Fields orders review of Salares Norte amid new delays

GOLD Fields has announced a review of its Salares Norte project in Chile amid a fresh round of production revisions.

The Johannesburg-headquartered firm said on Thursday first production from the proposed 600,000 ounce a year gold mine would not be until April. In September it pushed out first output to December after suffering commissioning delays.

As a result of this latest adjustment, gold production in 2024 from Salares Norte would be 220,000 to 250,000 ounces which is about half of previous guidance of between 400,000 and 430,000 oz for the year (asssuming December 1 first production). Monthly steady-state production is now not expected until the beginning of 2025, it said.

Salares Norte is proving a major headache for Gold Fields and will be a priority for incoming CEO Mike Fraser. Gold Fields blamed the commissioning delays on a shortage of staff at its contractor, safety-related pre-commissioning delays, and “late configuration changes” ordered by original equipment manufacturers to the project’s equipment control logic.

But questions around management vacuum will undoubtedly be levelled against the company’s board which has taken more than a year to fill the vacancy left by Chris Griffith who resigned in November 2022.

The commissioning delay may also result in another hike in project capital as well as higher all-in sustaining costs in 2024, previously estimated to be $1,050/oz (assuming first production on December 1).

Gold Fields said that 2025 and 2026 production guidance of nameplate 600,000 oz annually is “not expected to be affected” in terms of its timeline.

Worryingly for Gold Fields shareholders as it could result in further project delays, the company has appointed an “independent project and commissioning specialist” to review and validate the remaining schedule to full commissioning. “The mandate of the independent project and commissioning specialists being appointed, will include a review and verification of the schedule and plan,” the group said.

Details of life of mine production volumes and all-in costs, a revised capital cost estimate and feedback from the review specialist will be provided when Gold Fields announces its full year results in February, it said. At last count in September, the project’s capital cost had increased $20m to $1.04bn.

Since construction of Salares Norte began in February 2021, Gold Fields has reported several delays, due to factors such as Covid-19 and severe weather.

Capital costs have also increased from the first estimate of $860m, due to the project delays and higher inflation than expected. Salares Norte was originally scheduled to begin production at end-2022.

The post Gold Fields orders review of Salares Norte amid new delays appeared first on Miningmx.

 

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