Australia region

St Ives

Six months ended
      June
2016
  June
2015
 
Gold produced 000’oz   175.9   187.9  
Yield    – underground g/t   4.92   4.45  
            – surface g/t   2.39   1.80  
            – combined g/t   2.81   2.84  
AISC and AIC A$/oz   1,247   1,375  
  US$/o   915   1,079  
* Heap leach produced 400 ounces, rinsed from inventory (2,500 ounces was rinsed in the six months ended 30 June 2015).

Gold production decreased by 6 per cent from 187,900 ounces for the six months ended 30 June 2015 to 175,900 ounces for the six months ended 30 June 2016 due to the closure of the Cave Rocks and Athena underground mines and transition to a predominantly open pit operation.

Total tonnes mined increased by 113 per cent from 10.5 million tonnes for the six months ended 30 June 2015 to 22.4 million tonnes for the six months ended 30 June 2016. The additional tonnes mined are a result of the transition to a predominantly open pit operation.

At the underground operations, ore mined decreased by 53 per cent from 0.70 million tonnes for the six months ended 30 June 2015 to 0.33 million tonnes for the six months ended 30 June 2016 with the closure of the Cave Rocks and Athena underground mines. The grade mined increased by 19 per from 4.52 grams per tonne to 5.40 grams per tonne as a result of the closure of the lower grade Cave Rocks mine.

At the open pit operations, total ore tonnes mined increased by 213 per cent from 0.60 million tonnes for the six months ended 30 June 2015 to 1.88 million tonnes for the six months ended 30 June 2016 due to the ramp-up of Invincible pit. Grade mined increased by 11 per cent from 2.25 grams per tonne to 2.49 grams per tonne as the Invincible pit moved into a higher grade portion of the ore body.

Operational waste tonnes mined increased by 287 per cent from 1.20 million tonnes for the six months ended 30 June 2015 to 4.64 million tonnes for the six months ended 30 June 2016. Capital waste tonnes mined increased by 94 per cent from 8.0 million tonnes to 15.5 million tonnes. The strip ratio decreased from 15.5 to 10.7 as the Invincible Pit has moved from a predominately stripping to a production phase, partially offset by the stripping of the Neptune pit in the six months ended 30 June 2016. The increased tonnes reflect the increase in activity at the Invincible mine which is now in full production and the commencement of Stage 2 of the Neptune open pit giving St Ives two significant areas of open pit activity in 2016 and beyond. The strip ratio for Invincible pit decreased from 20.5 to 8.7, while the strip ratio for Neptune pit was 58.2 for the six months ended 30 June 2016. There was no mining activity at Neptune during the first half of 2015.

Throughput at the Lefroy mill decreased by 5 per cent from 2.05 million tonnes for the six months ended 30 June 2015 to 1.95 million tonnes for the six months ended 30 June 2016 due to low grade stockpiles used to supplement production for the six months ended June 2015. St Ives adopted a campaign milling strategy towards the end of the six months ended 30 June 2015. Yield decreased from 2.84 grams per tonne to 2.81 grams per tonne in line with less underground production, offset by no longer feeding low grade stockpiled material. Gold production from the Lefroy mill decreased from 185,400 ounces for the six months ended 30 June 2015 to 173,500 ounces for the six months ended 30 June 2016. In addition, 93,000 tonnes of toll treatment produced 2,000 ounces for the six months to June 2016.

Residual leaching and irrigation of the existing heap leach pad produced a further 400 ounces for the six months ended 30 June 2016. This compared with 2,500 ounces produced for the six months ended 30 June 2015. The residual leaching has now ceased being economic and the heap leach is being closed. Since cessation of stacking activities, a total of 24,800 ounces was produced.

Net operating costs, including gold-in-process movements decreased from A$164 million (US$129 million) for the six months ended 30 June 2015 to A$108 million (US$79 million) for the six months ended 30 June 2016. The significant cost reduction is the result of:

the closure of the Cave Rocks and Athena underground mines;
efficiencies in the open pits with the cost per tonne of material movement decreasing by 29 per cent on larger volumes and productivity improvements; and
the benefits of enhanced open pit production resulting in a credit of A$16 million (US$12 million) due to a build-up of stockpiles compared with a cost of A$38 million (US$30 million) on drawdown of stockpiles in the six months ended 30 June 2015.

The benefits of the above cost reductions were partially offset by increased mining volumes.

Operating profit increased from A$125 million (US$98 million) for the six months ended 30 June 2015 to A$182 million (US$134 million) for the six months ended 30 June 2016 due to a higher Australian dollar gold price (A$1,651 per ounce vs A$1,542 per ounce) and significant net operating cost reductions, partially offset by lower production.

Capital expenditure increased by 22 per cent from A$77 million (US$60 million) for the six months ended 30 June 2015 to A$94 million (US$69 million) for the six months ended 30 June 2016 with an additional A$13 million (US$10 million) incurred on pre-stripping at Neptune and A5 pit.

All-in sustaining costs and total all-in cost decreased by 9 per cent from A$1,375 per ounce (US$1,079 per ounce) for the six months ended 30 June 2015 to A$1,247 per ounce (US$915 per ounce) for the six months ended 30 June 2016 due to the significant reduction in net operating costs, partially offset by lower production and higher capital expenditure.

Agnew/Lawlers

Six months ended
      June
2016
  June
2015
 
Gold produced 000’oz   109.3   113.4  
Yield g/t   6.00   5.64  
AISC and AIC A$/oz   1,456   1,277  
  US$/oz   1,068   1,001  

Gold production decreased by 4 per cent from 113,400 ounces for the six months ended 30 June 2015 to 109,300 ounces for the six months ended 30 June 2015 mainly due to a reduction in ore tonnes mined and processed, partially offset by higher grades

Ore mined from underground decreased by 14 per cent from 622,000 tonnes for the six months ended 30 June 2015 to 532,000 tonnes for the six months ended 30 June 2016. Ore mined from New Holland decreased by 19 per cent from 345,000 tonnes to 278,000 tonnes, mainly due to the Genesis 500 Series North nearing completion and the focus on developing the Cinderella ore body in the six months ended June 2016. Ore mined at Waroonga decreased by 8 per cent from 277,000 tonnes to 254,000 tonnes due to more difficult ground conditions encountered in the six months to June 2016. Head grade mined increased by 7 per cent from 6.02 grams per tonne to 6.44 grams per tonne mainly due to a larger concentration of ore sourced from the higher grade Kim ore body.

Tonnes processed decreased by 10 per cent from 625,700 tonnes for the six months ended 30 June 2015 to 566,200 tonnes for the six months ended 30 June 2016 due to lower tonnes available from the mines. The combined yield increased from 5.64 grams per tonne to 6.00 grams per tonne mainly due to higher grades mined.

Net operating costs, including gold-in-process movements, increased by 2 per cent from A$93 million (US$73 million) for the six months ended 30 June 2015 to A$95 million (US$70 million) for the six months ended 30 June 2016 due to a A$4 million (US$3 million) drawdown of inventory for the six months ended 30 June 2016 compared with a A$1 million (US$1 million) build-up of inventory for the six months ended 30 June 2015.

Operating profit increased from A$82 million (US$64 million) for the six months ended 30 June 2015 to A$84 million (US$61 million) for the six months ended 30 June 2016 due to the higher Australian dollar gold price (A$1,639 per ounce vs A$1,538 per ounce), partially offset by reduced production and higher net operating costs.

Capital expenditure increased by 23 per cent from A$44 million (US$34 million for the six months ended 30 June 2015 to A$54 million (US$40 million) for the six months ended 30 June 2016. The increase in capital expenditure was due to the decline development to the Cinderella ore body at New Holland, an exploration development drive towards Waroonga North at Waroonga mine and increased exploration expenditure across the lease.

All-in sustaining costs and total all-in cost increased by 14 per cent from A$1,277 per ounce (US$1,001 per ounce) for the six months ended 30 June 2015 to A$1,456 per ounce (US$1,068 per ounce) for the six months ended 30 June 2016 due to decreased gold sold, higher net operating costs and higher capital expenditure. All-insustaining costs are expected to decrease in the second half of 2016 as Cinderella moves into production and with the completion of the Waroonga North exploration development drive.

Darlot

Six months ended
      June
2016
  June
2015
 
Gold produced 000’oz   37.2   28.5  
Yield g/t   5.02   4.14  
AISC and AIC A$/oz   1,554   1,786  
  US$/oz   1,139   1,400  

Gold production increased by 31 per cent from 28,500 ounces for the six months ended 30 June 2015 to 37,200 ounces for the six months ended 30 June 2016 due to increased tonnes and higher grade mined and processed from the Lords South Lower ore body.

Ore mined from underground increased by 5 per cent from 194,200 tonnes to 204,800 tonnes. Head grade mined increased by 18 per cent from 4.96 grams per tonne for the six months ended 30 June 2015 to 5.86 grams per tonne for the six months ended 30 June 2016. The increase in tonnes and grades was due to mining of higher grade remnant areas and extensions to the Lords South Lower ore body. A further 25,300 tonnes at 1.35 grams per tonne were sourced from a surface oxide trial during the six months ended June 2016 contributing approximately 1,000 ounces.

Tonnes processed increased by 7 per cent from 214,300 tonnes for the six months ended 30 June 2015 to 230,100 tonnes for the six months ended 30 June 2016. The yield increased from 4.14 grams per tonne to 5.02 grams per tonne due to higher grade ore mined, partially offset by the lower grade oxide trial.

Net operating costs, including gold-in-process movements, increased by 14 per cent from A$36 million (US$28 million) for the six months ended 30 June 2015 to A$41 million (US$30 million) for the six months ended 30 June 2016. The increase reflects increased volumes mined and processed as well as a A$1 million (US$nil million) build-up for the six months ended 30 June 2016 compared with A$2 million (US$2 million) for the six months ended 30 June 2015.

Operating profit increased from A$8 million (US$6 million) to A$21 million (US$15 million) due to the higher Australian dollar gold price (A$1,669 per ounce vs A$1,538 per ounce), partially offset by the higher net operating costs.

Capital expenditure increased by 8 per cent from A$13 million (US$10 million) to A$14 million (US$10 million). Capital expenditure in the six months ended 30 June 2016 was mainly incurred on exploration and the commencement of development to the Oval ore body. The Oval ore body is a recent discovery which is expected to provide the primary ore feed in 2017 and into 2018. The Oval ore body extends the life of mine allowing Darlot to maintain its strategy of self-funding exploration expenditure while it continues an aggressive exploration program to secure its future as a Gold Fields franchise asset.

All-in sustaining costs and total all-in cost decreased by 13 per cent from A$1,786 per ounce (US$1,400 per ounce) for the six months ended 30 June 2015 to A$1,554 per ounce (US$1,139 per ounce) for the six months ended 30 June 2016 due to higher gold sold, partially offset by higher net operating cost

Granny Smith

Six months ended
      June
2016
  June
2015
 
Gold produced 000’oz   143.7   146.6  
Yield g/t   6.03   6.23  
AISC and AIC A$/oz   1,068   1,008  
  US$/oz   783   789  

Gold production decreased by 2 per cent from 146,600 ounces for the six months ended 30 June 2015 to 143,700 ounces for the six months ended 30 June 2016 due to lower grades mined in line with the mining sequence and as planned, as well as an increase in stockpiled ore as a consequence of the campaign milling.

Ore mined from underground increased by 13 per cent from 677,000 tonnes to 763,000 tonnes. Head grade mined decreased by 4 per cent from 6.77 grams per tonne for the six months ended 30 June 2015 to 6.52 grams per tonne for the six months ended 30 June 2016 in line with the mining plan.

Tonnes processed increased by 1 per cent from 731,000 tonnes for the six months ended 30 June 2015 to 741,300 tonnes for the six months ended 30 June 2016. The yield decreased from 6.23 grams per tonne to 6.03 grams per tonne due to lower head grades. The mill is not operating at capacity and the timing of the milling campaign results in variances between tonnes mined and milled in any given period which also impacts yield variances between head grade and yield.

Net operating costs, including gold-in-process movements decreased by 2 per cent from A$94 million (US$73 million) to A$92 million (US$67 million). Mining costs increased on the additional volumes, but was more than offset by the net gold in process credit associated with the respective timing of the milling campaigns, referred to above. The gold-in-process credit to cost of A$2 million (US$1 million) for the six months ended June 2016 compared with a charge of A$6 million (US$5 million) for the six months ended June 2015. This A$8 million change in gold-in-process was mainly due to timing of the campaign milling.

Operating profit increased by 13 per cent from A$132 million (US$103 million) for the six months ended 30 June 2015 to A$149 million (US$109 million) for the six months ended 30 June 2016 due to the higher Australian gold price (A$1,674 per ounce vs A$1,539 per ounce).

Capital expenditure increased from A$43 million (US$34 million) for the six months ended 30 June 2015 to A$51 million (US$38 million) for the six months ended 30 June 2016. The majority of the expenditure related to capital development, exploration and the establishment of the fresh air intake ventilation raise. The mine moved from diesel power to gas fired power in May 2016 with the completion of construction and the commissioning of the new power station. The new power station is expected to provide savings in power costs, lower maintenance costs and the risk of power interruptions. It is also expected to reduce carbon emissions.

All-in sustaining costs and total all-in cost increased by 6 per cent from A$1,008 per ounce (US$789 per ounce) for the six months ended 30 June 2015 to A$1,068 per ounce (US$783 per ounce) for the six months ended 30 June 2016 mainly due to lower gold sold, higher capital expenditure, partially offset by the lower net operating costs.