South Africa’s Gold Fields (NYSE: GFI) has once again delayed first gold production at its Salares Norte project in Chile from last month until April 2024, citing delays caused by commissioning problems.
Construction of the US$1 billion ($1.3 billion) open pit mine began in 2021 and, in the process, the company has had to overcome some unique challenges, such as safely removing a handful of critically endangered chinchillas that lived on site.
Production was initially targeted for early last year, but the company has missed a few deadlines, including the most recent one in December.
Despite having the project 99.3% completed, Gold Fields said that necessary revisions to critical safety aspects, staff availability for the primary contractor, and late configuration changes have caused the latest set back.
As a result, production estimates for this year have been revised down. Gold Fields now expects to churn out around 220,000-250,000 oz. of gold equivalent compared to the 400,000-430,000 oz. announced in September. The mine is expected to produce 600,000 oz. of gold next year and the same in 2026.
Salares Norte, located in Chile’s northern Atacama region at between 3,900 and 4,700 meters above sea level, is expected to generate an average of 2.8 million oz. per year of doré metal (gold–silver). This translates into 350,000 gold equivalent oz. annually.
The mine is strategic for Gold Fields, as it will serve as a base to consolidate the company’s presence in South America.
Chile’s gold production peaked in 2000 at 54.1 tonnes, according to data from Cochilco, the country’s copper commission. The nation, the world’s No.1 copper producer and second-largest lithium producer after Australia, has dropped in the gold producing nations ranking to the 23rd position as of December 2023, according to data from the World Gold Council.
Shares in Gold Fields traded at US$14.42 on Tuesday morning, valuing the company at US$13.3 billion. Its shares traded in a 52-week range of US$8.89 and US$17.78.
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