Gold Fields Ltd advises that the Salares Norte gold project in Chile, which commenced construction in February 2021, is currently 97% complete, with certain sections of the plant already in pre-commissioning.
Ramp up of the project has been significantly de-risked with mining activities having continued throughout the construction and commissioning phase resulting in 1.6 million ore tonnes and 380,000 ounces of gold stockpiled to date. Operational staff compliments have been filled, with operational staff an integral part of the commissioning process as sections of the project are handed over to operations.
However, it adds that certain components of the plant require commissioning by the OEM vendor to maintain the validity of their warranties. “Challenges in securing the OEM vendor representatives, due to previously announced delays by the main project contractor, have resulted in an approximate two-month delay to commissioning of the mills and filter presses and therefore a delay to the production of first gold.” First gold from the project is still expected in the fourth quarter of 2023 but has moved from the beginning to the latter part of the quarter. Fluor is the processing contractor for the operation, with the mills and filters supplied by Metso.
If first gold is produced on December 1, 2023, production for 2023 is expected to be 1,000 gold equivalent ounces (oz-eq) (previously 15,000-20,000 oz-eq). The production outlook for 2024 has also been impacted and is expected to fall in the range of 400,000 oz-eq (at All-in Costs (AIC) of US$900/oz-eq) to 430 000 oz-eq (at AIC of US$860/oz-eq) from 500,000 oz-eq announced previously. Should the delay be longer, and first gold is only produced at the end of December 2023, production in 2024 is expected to be 350,000 oz-eq at AIC of US$1,050/oz-eq.
Despite the downgrade in production for 2023 and 2024, steady state production will be reached by the beginning of 2025 and therefore planned production volumes for 2025 and 2026 remain unchanged at 600,000 oz-eq. Average production for the first six years of the mine life (2024 – 2029) remain unchanged at 500,000 oz-eq per annum (as previously guided in February 2023). Over the total life of mine (2024 – 2033) average annual production remains at 355,000 oz-eq.
Adjusting for inflation to 2024 money, the Project’s AIC is expected to average US$700/oz-eq for the first six years of the mine life (2024 – 2029) and US$780/oz-eq over the total life of mine (2024 – 2033).
The total project capital estimate has increased by US$20 million to US$1,040 million due to the capitalisation of costs following the later commencement date for first gold. The miner concludes: “Salares Norte remains a world-class project with a payback period of less than three years at spot prices. Gold Fields will provide regular updates on the project until first gold is produced and during the ramp-up phase.”
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