UPDATE 2-Gold Fields to boost output at South Africa mine

Fri Oct 2, 2009 12:12pm EDT

* Company to spend $1.10 bln

* Output to rise to 5.8 tonnes per qtr by 2014

* Company to raise cash via debt, bonds

By Shapi Shacinda

SOUTH DEEP MINE, South Africa, Oct 2 (Reuters) - Gold Fields (GFIJ.J), the world's No. 4 gold producer, said on Friday it plans to spend 8.5 billion rand ($1.10 billion) to develop its South Deep mine in South Africa by 2014.

The mine, near Johannesburg, will produce around 62,000 ounces of gold per quarter this year, and 180,000 ounces of gold per quarter in 2014, Vishnu Pillay, head of Gold Fields' South Africa operations said during a visit to the mine.

"We want to be the largest producer in the world," Pillay told Reuters.

"We will use debt financing and bonds, those are facilities available to the company," he said when asked how the company would fund the mine's expansion.

Pillay also said a feasibility study for producing uranium at the mine was underway and a report would be ready before the end of this year.

"We have defined a resource base of 51 million tonnes of uranium but the feasibility will give us exactly how much we can exploit," Pillay said.

Pillay said the new developments at the mine, which employs around 4,500 people, would create more jobs despite using highly modernised methods of mining.

Andy Brown the head of operations at the South Deep mine, told reporters the company will upgrade some mine shafts, expand the mining area and reduce production costs by using new technology and improve efficiency to ramp up production.

Brown said the 2014 project expansion forecast will include vent shaft deepening at the mine, grade control drilling to maximise output and construction of an ice plant.

He said some contracting companies had already been engaged to carry out expansions and upgrades to meet the 2014 target of raising output and that the company would consider expanding mining at the old South Deep mine.

"There is potential to mine 1.1 million ounces from the old mine. We have four independent project areas defined based on accessibility (and) full feasibility is underway and expected completion is 2012," Brown said.

The company said it had improved safety underground and within the mine's premises and had recorded 490 days in a row without fatalities.

Mine fatalities are a big concern in South Africa, where some 120 mineworkers have died this year.

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