Regional overview: South America

3.6.1 Introduction

Our South America Region has both an operating mine and an advanced exploration project. Our operational activities are centred around the Cerro Corona mine in northern Peru, in which we hold an 81% interest through our subsidiary company Gold Fields La Cima S.A.A. Gold Fields also manages the Chucapaca exploration project in southern Peru (p122). This project is being developed by Minera Gold Fields Peru S.A. (an exploration subsidiary of Gold Fields), in which Gold Fields holds 51% and Peruvian mining group Buenaventura (49%).

Cerro Corona is OHSAS 18001 and ISO 14001 certified, and is fully compliant with the International Cyanide Management Code.

Performance in C2010

Cerro Corona increased production by 22% to 406,000 gold-equivalent ounces in C2010 (C2009: 332,000 ounces). This comprised gold production of 152,000 ounces and copper production of 41,000 tonnes. This is as a result of the processing of higher-grades, increased throughput above design capacity and enhanced recoveries. The NCE margin for the mine improved significantly from 35% in C2009 to 56% in C2010. Other notable achievements in C2010 include:

  • 6.8 million man hours without a Lost Time injury
  • A first place award in the open-cast Peruvian Annual Mining Safety competition
  • Maintenance of Mineral Reserves at 4.3 million ounces, despite depletion
  • Payment of the mine’s first dividend of
    US$30 million
  • Debt restructuring, including a reduction of US$130 million of project finance
  • Commencement of the oxide plant expansion feasibility study

At Chucapaca, we accelerated a 100,000 meter drilling programme to deliver an Indicated Resource in late 2011, with a construction decision expected during 2012. In parallel, we initiated all activities and studies required to confirm the project’s feasibility and obtain environmental approval. A substantial community engagement and socio-economic plan has been launched to gain early traction with local communities.

Outlook for 2011

The Regional target of 1 million ounces in construction or development by 2015 remains our core growth objective. The outlook for C2011 is to produce between 330,000 and 360,000 gold-equivalent ounces at an NCE of U$700/eq-oz and cash costs of US$420/eq-oz.

Specific growth actions at Cerro Corona include:

  • Completion of the second raise of the tailings dam
  • Completion of the feasibility study for the expanded oxide plant and initiation of construction
  • Continued investigation into opportunities to increase tailings storage capacity
  • Assess near surface mineralisation potential north of the current pit through infill drilling

In many regions of Peru, low levels of health, education and income pose major challenges to local communities. We are contributing to the enhancement of these human development measures through a range of socio-economic development projects (p160). The map (below), prepared by Maplecroft, highlights the relative sub-national levels of human development across the country.