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Gruyere Project - Australia

GFI’s 50% ownership is held by Gruyere Mining Co Pty Ltd and will be reported as managed, unless otherwise stated

A long-life, low-cost, undeveloped gold project in the eastern Yilgarn, Western Australia

Mineral Reserve

1.76Moz gold

Mineral Resource

3.31Moz gold

Gruyere is under first time reporting for Gold Fields as part of the Gruyere Project Joint Venture (JV) with Gold Road Resources Limited (Gold Road). Mineral Resources and Ore Reserves are reported as at the time of the JV deal and match the figures in the Gold Road 7 November 2016 ASX announcement.

The feasibility study for the open pit project on the Gruyere deposit, generated defined a ~13-year LoM and the Ore Reserves are based on mining and processing parameters from the feasibility study. The mine will be developed and operated under Gold Fields management and the JV committee.

Asset fundamentals

  Asset fundamentals  
  General location     The Gruyere deposit, centered at latitude 27° 59' south and longitude 123° 50' east, within the Yamarna Terrane of the eastern Yilgarn, Western Australia. Gruyere is located 200km east of Laverton and 1,000km north-east of Perth.  
  Licence status and holdings     The project, with granted tenements for mining, exploration and miscellaneous of 180,410ha, is located on mining lease M38/1267 granted on 5 May 2016 for a period of 21 years. The mining lease is wholly within the Yamarna Pastoral Lease.  
  Deposit type     Gruyere is an Archaean orogenic gold deposit. Mineralisation is hosted within the Gruyere Porphyry. Gold is associated with varying intensity albite-sericite-chlorite-biotite-calcite alteration of the host rock.  
  LoM     Feasibility studies for the total project indicate a 3.52Moz Ore Reserve (1.76Moz attributable to GFI) and 15-year project life, supporting average annual gold production of 270,000 (50% attributable to GFI) ounces over LoM of 13 years.  

Brief history

Gold Road discovered the mineralisation at Gruyere in August 2013 with interface rotary air blast drilling. To date, a total of 87,066m have been drilled from 470 holes on the project [357 reverse circulation (RC) holes for 41,264m, 73 holes with RC pre-collars for 14,694m RC and 16,506m diamond core tail, and 40 full diamond drill holes (DDH) for 14,603m].

The Gruyere Project is 50% owned by Gold Fields Limited after forming a joint venture with Gold Road in November 2016. Gold Fields also has acquired a 50% joint-venture position over a further three resources within the Yamarna Terrane (Attila, Alaric, and Central Bore), comprising 144km2 of exploration and mining tenure.

Geology

The Gruyere deposit is located on a flexure point of the regional scale Dorothy Hills Shear Zone within the Dorothy Hills Greenstone Belt, where the shear zone changes from a northerly direction to a north-northwest direction. Orogenic gold mineralisation is hosted within the steep easterly dipping Gruyere Porphyry, a medium-grained quartz monzonite porphyry that has intruded the country rocks, elongated in the direction of the shear zone. The host Gruyere Porphyry averages around 90m in horizontal width through the deposit with a maximum width of 190m in the centre of the deposit and tapering to around 5m to 10m width at the northern and southern extremities. The entire Gruyere Porphyry is variably altered and gold grade is related to variations in style and intensity of alteration, structure, veining and sulphide species. Zones containing higher grade gold mineralisation above 1.2 grams per tonne (g/t) gold generally have strong albite ± sericite ± chlorite ± biotite alteration and are associated with a sulphide assemblage of pyrrhotite + pyrite ± arsenopyrite, weak to moderate foliation, common micro-fracturing and steeply dipping quartz veining. Gold mineralisation at Attila, Alaric and Central Bore comprises steeply dipping shear hosted gold in volcaniclastic sequences, with gold associated with zones of albite ± sericite ± chlorite ± pyrite mineralisation.

Level of study, processing methodology, sustainability and permits

A feasibility study was completed on the project in October 2016, which showed a 3.52Moz Ore Reserve (1.76Moz attributable to GFI), supporting an average annual gold production of 270,000oz (50% attributable to GFI) over a LoM of 13 years.

The project proposal underwent formal environmental assessment by the Office of Environmental Protection Authority (OEPA) under Part IV of the Environmental Protection Act 1986 (EP Act). The Assessment on Proponent Information, Category A (API-A) that was required for the project was prepared. The management and protection of stygofauna (aquatic fauna that live in groundwater systems or aquifers) that have been identified in the Yeo Borefield area of the project was the key environmental factor identified by OEPA that required formal impact assessment. Final project EPA Part IV approval was received on 29 December 2016. No commonwealth Environmental Assessment was required under the Environment Protection and Biodiversity Conservation Act (EPBC Act).

The approvals strategy adopted is to separate the project into two distinct components: (1) the mining, process plant and associated infrastructure (inclusive of borefields and access roads); and (2) the gas supply. The Department of Mines and Petroleum (DMP) is the lead agency for mining approvals and is the agency responsible for administering the Mining Act 1978 (Western Australia).

A Project Management Plan, Mining Proposal and Mine Closure Plan detailing information on identification, evaluation and management of environmental impacts relevant to the project and the surrounding environment was submitted to DMP and approval granted in February 2017. In parallel with these proposals, the project also received various works approvals and licences for construction and operations of prescribed premises under Part V of the EP Act. These approvals, from the Department of Environment Regulation (DER), were also received in February, 2017

The proposed power source for the project is an onsite, gas fired power station with emergency dual fuel (diesel/gas) capability under a build-own-operate (BOO) contract. Gas will be delivered to site via a 220km gas lateral from the Eastern Goldfields Pipeline (EGP). A Miscellaneous Licence for this gas pipeline alignment is currently being negotiated with underlying tenement holders with the grant of tenure expected in Q2 2017. A number of applications will then be lodged with the DMP to gain approvals for the construction and operation of the pipeline.

Opportunities for sustainability are being investigated on the back of the Gruyere Central Bore Native Title Agreement (GCBNTA) which was signed with the Yilka and Cosmo Newberry Aboriginal Community (CNAC) on 3 May 2016. As registered custodians of the Yamarna area, the Yilka People will realise employment, contracting and training opportunities throughout the life of the project.

Plan for Gruyere Project - Australia

Gruyere Project

 

Mineral Resources

The Mineral Resources and Ore Reserves were estimated by Gold Road as of April 2016 and October 2016 respectively, prior to the acquisition of the Gruyere assets by Gold Fields. Gold Road used a gold price of A$1,700/oz and A$1,500/oz for the Mineral Resources and Ore Reserve respectively, which are below the current Gold Fields planning gold price of A$1,850/oz and A$1,600/oz respectively. Gold Road report their Mineral Resources and Ore Reserves in accordance with the requirements of the 2012 JORC Code.

In light of the above and the limited time frame between the acquisition of the Gruyere assets and the Gold Fields year-end reporting cycle, the Gold Road Mineral Resource and Ore Reserve acquisition figures have been accepted as estimated, for the official statement. The Gold Fields protocols and standards will be applied in the December 2017 Mineral Resource and Mineral Reserve reporting cycle in order to quote a statement that follows the requirements of the SAMREC 2016 Code.

The total project, as well as the GFI 50% share, as held by Gruyere Mining Co Pty Ltd, is reported below.

      Gruyere Project Joint Venture
100% basis
    Gold Fields Limited
50%
 
Project Name/Category     Tonnes
(Mt)
  Grade
(g/t Au)
Contained
Metal
(Moz Au)
    Tonnes
(Mt)
  Grade
(g/t Au)
Contained
Metal
(Moz Au)
 
Measured     13.86   1.2 0.53     6.93   1.2 0.26  
Indicated     91.12   1.3 3.79     45.56   1.3 1.89  
Inferred     42.73   1.4 1.85     21.36   1.4 0.92  
Gruyere Total     147.71   1.3 6.16     73.85   1.3 3.08  
Measured     0.04   26.6 0.04     0.02   26.6 0.02  
Indicated     0.40   9.0 0.12     0.20   9.0 0.06  
Inferred     0.19   5.0 0.03     0.09   5.0 0.02  
Central Bore Total     0.63   9.0 0.18     0.32   9.0 0.09  
Measured     0.66   2.0 0.04     0.33   2.0 0.02  
Indicated     3.85   1.5 0.19     1.93   1.5 0.09  
Inferred     0.79   1.6 0.04     0.39   1.6 0.02  
Attila Trend Total     5.30   1.6 0.27     2.65   1.6 0.14  
Measured     14.57   1.3 0.6     7.28   1.3 0.3  
Indicated     95.37   1.3 4.09     47.69   1.3 2.05  
Inferred     43.70   1.4 1.92     21.85   1.4 0.96  
Total     153.64   1.3 6.61     76.82   1.3 3.31  

Notes:
All Mineral Resources are completed in accordance with the 2012 JORC Code
The Gruyere Project Joint Venture is a 50:50 joint venture between Gold Road and Gruyere Mining Company Pty Limited, a wholly owned Australian subsidiary of Gold Fields Ltd
Gruyere Mineral Resource reported at 0.5 g/t gold cut-off, constrained within an A$1,700/oz gold optimised pit shell based on mining and processing parameters from the PFS and geotechnical parameters from the previous Mineral Resource estimate (Gold Road ASX announcement dated 22 April 2016)
Central Bore Mineral Resource reported at 1.0 g/t gold cut-off (2014 Annual Report)
Attila Trend (Attila and Alaric) Mineral Resource reported at 0.7 g/t gold cut-off, constrained within an A$1,600/oz gold optimised pit shell (Gold Road ASX announcement dated 16 September 2015)
All figures are rounded to reflect appropriate levels of confidence. Apparent differences may occur due to rounding
Mineral Resources are inclusive of Ore Reserves

Gruyere JV Classified Ore Reserve

      Total Gruyere Project JV
100% basis
    Gold Fields Limited
50%
 
Category     Tonnes
(Mt)
  Grade
(g/t Au)
Contained
Metal
(Moz Au)
    Tonnes
(Mt)
  Grade
(g/t Au)
Contained
Metal
(Moz Au)
 
Proved     14.87   1.1 0.52     7.44   1.1 0.26  
Probable     76.70   1.2 3.00     38.35   1.2 1.50  
Total     91.57   1.2 3.52     45.78   1.2 1.76  

Notes:
The Ore Reserve is completed in accordance with the 2012 JORC Code
The Gruyere Project Joint Venture is a 50:50 joint venture between Gold Road and Gruyere Mining Company Pty Limited, a wholly owned Australian subsidiary of Gold Fields Ltd
Gold Road holds an uncapped 1.5% net smelter return royalty on Gold Fields Ltd’s share of production from the Gruyere Project Joint Venture once total gold production exceeds 2Moz
The Ore Reserve for the Gruyere deposit is evaluated using a gold price of A$1,500/oz (ASX announcement dated 19 October 2016)
The Ore Reserve is evaluated using variable cut-off grades: Oxide 0.35g/t gold, Transitional 0.39g/t gold and Fresh 0.43g/t gold
Ore block tonnage dilution averages 3.2%; Ore block gold loss is estimated at 1.4%
All figures are rounded to reflect appropriate levels of confidence. Apparent differences may occur due to rounding

Competent persons

The Competent Persons listed below are full-time employees of Gold Road Resources Limited, except for D Varcoe and B Gosling who are external consultants.

J Osborne
Executive Director – Exploration and Growth

BSc Geology (Hons). Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM 209333)

25 years' of field and management experience covering all aspects of the mining and exploration process in Australia and internationally through senior positions held with Gold Fields Ltd and WMC Resources Ltd. He is the lead Competent Person and is responsible for the overall accuracy, standard and compliance of the declaration.

J Donaldson
Geology Manager

BSc Geology (Hons). Member of the Australian Institute of Geoscientists and a Registered Professional Geoscientist (MAIG RPGeo Mining 10147)

24 years' experience in mine geology and resource geology, specialising in gold resource estimation in Australia and internationally through senior and managerial positions held with Gold Fields Ltd and WMC Resources Ltd. He is responsible for compiling and reviewing the Mineral Resource estimates.

D Varcoe
Ore Reserve Consultant – AMC Consultants

BE Mining Engineering. Member of the Australasian Institute of Mining and Metallurgy (MAusIMM 105971)

31 years' of experience in mine management and planning with Gold Fields Ltd, Rio Tinto and GME Resources. As a consultant to Gold Road Resources Limited, he is responsible for compiling and reviewing the Ore Reserve estimate.

B Gosling
Process Engineering, Design Work and Costing Consultant – GR Engineering Consultants

BE Extractive Metallurgy, MBA. Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM 105699)

31 years' extractive metallurgy and senior process engineer experience around Australia. Commodities include gold, nickel, lead and zinc. As a consultant to Gold Road Resources Limited, he is responsible for compiling and reviewing the process engineering design work and costing.

In addition to the team of Competent Persons outlined above, the Gruyere FS relied on the review, participation and technical input from a range of experts who are independent of Gold Road. Refer to GOLD ROAD RESOURCES, GRUYERE GOLD PROJECT – Located in Western Australia, Feasibility Study Technical Report (Table 3-1). ASX Announcement 15 November 2016