Is South Deep SA’s most disappointing mine? – by David McKay ( – May 22, 2015)

[] – THERE’S a growing suspicion that South Africa’s last great gold mine, the South Deep project on the West Rand, may prove to be its most disappointing after Gold Fields acknowledged it, like the project’s previous owners, would fail to have it deliver on its production promises.

Since its earliest development to its current position now, the deposit has refused to yield its treasures in a way its owners expected and promised. In the process, it has absorbed billions of rands of investment; yet two decades on, ‘the mine’ is still ‘a project’.

JCI, then a limb of a sprawling Anglo American, started South Deep. It was then taken over by the late Brett Kebble when he ran JCI in combination with his Western Areas.

Half of the project was sold to Placer Dome in the hope that North American know-how and capital would help bring South Deep to the 800,000 to 900,000 ounce/year to life. But to no avail.

The asset then switched hands with another North American owner, Barrick Gold, attempting to wrest gold economically from South Deep until it too sold the project to Gold Fields for about $1.5bn in an expensive game of pass the parcel.

More than eight years on, and with the music definitely stopped, Gold Fields CEO, Nick Holland, was moved to comment on May 7 that in respect of South Deep, he was now focusing on “inputs, not the outputs”.

It, therefore, looks like the 650,000 to 700,000 oz targets identified by Holland are now the subject of speculation again. This must be a bitter pill for shareholders who have already absorbed the 50,000 oz/year climb down in South Deep’s planned output announced by Gold Fields some two years ago.

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