Gold Fields expects first gold from Salares Norte later than planned due to issues with OEM vendor
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(Kitco News) - Major gold producer Gold Fields (NYSE: GFI) reported today that first gold from the company’s new Salares Norte project in Chile is still expected in Q4 2023, but has moved from the beginning to the latter part of the quarter due to issues with OEM vendor.
The company said in a press release that certain components of the plant require commissioning by the original equipment manufacturer (OEM) vendor to maintain the validity of their warranties.
“Challenges in securing the OEM vendor representatives, due to previously announced delays by the main contractor, have resulted in a circa two-month delay to commissioning of the mills and filter presses and therefore a delay to the production of first gold,” it added.
Gold Fields said that if first gold is produced on 1 December 2023, production for 2023 is expected to be 1,000 gold equivalent ounces (previously 15,000 – 20,000 gold equivalent ounces).
2024 production has also been impacted and is expected to fall in the range of 400,000 gold equivalent ounces at all-in costs (AIC) of US$900/oz eq to 430,000 gold equivalent ounces at AIC of US$860/oz eq (previously 500,000 gold equivalent ounces).
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 gold equivalent ounces at AIC of US$1,050/oz eq.
Importantly, Gold Fields said that 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 gold equivalent ounces.
“The Salares Norte project remains a world-class project with a payback period of less than three years at spot prices,” the company noted in a press release.
Salares Norte is a high-grade, epithermal gold-silver, open-pit deposit situated in the High Andes of northern Chile. During April 2020, Gold Fields’ Board formally approved development of the project. The project has 4.3Moz of gold, 398Mlb of copper and 42.2Moz of silver in proved and probable reserves.