Wednesday, May 10, 2006
Accident Halves Gold Production At South Deep
Bloomberg reports on a mine accident. "Barrick Gold Corp.'s production from South Deep mine, the world's largest gold deposit, may halve for as long as a year after damage to its main shaft, partner Western Areas Ltd. said. 'Initial estimates are that the main shaft will be out of commission for nine to 12 months,' Johannesburg-based Western Areas said today in a statement to the city's stock exchange. The mine is currently producing gold at half its planned output through an older shaft, the company added."
"South Deep, developed by Western Areas and Placer Dome Inc. before it was bought by Toronto-based Barrick, cost more than $1 billion to dig and was three years late starting production. At over two miles deep, it's Barrick's deepest mine, making it more dangerous to operate than shallower pits. Barrick is the only foreign company among the top 10 gold producers with operations in South Africa, the world's largest source of the metal."
"'It's catastrophic,' David Davis, South Africa's top-rated gold analyst, said. '`The question is what impact this will have on Barrick's nerves and whether their appetite for deep-level mining in South Africa will dry up.'"
"Western Areas shares dropped 3.99 rand, or 9.2 percent, to 39.50 rand at 1:27 p.m. in Johannesburg, the biggest drop in a year. That cut its market value to 6.1 billion rand ($1.01 billion)."
"A container, used to hoist rock from underground, and a 6.7-kilometer (4.2 miles) steel rope, together weighing about 99 metric tons, 'bulleted down the shaft' during routine maintenance, Gordon Thompson, South Deep's manager, said in an interview from the mine. 'This is a big one,' he said. An appraisal of the damage to the mine, which contains 3,500 tons of steel, more than was used to build the Eiffel Tower, will take about two weeks, he added."
"South Deep produced 107,946 ounces of gold in the first quarter, 16 percent less than the previous quarter. The mine, which is building up to full annual production of 700,000 ounces, yielded 469,168 ounces last year. Last year, South African mines produced about an eighth of the world's gold production of 81 million ounces, according to a London-based precious metals consultancy."
"South Deep, developed by Western Areas and Placer Dome Inc. before it was bought by Toronto-based Barrick, cost more than $1 billion to dig and was three years late starting production. At over two miles deep, it's Barrick's deepest mine, making it more dangerous to operate than shallower pits. Barrick is the only foreign company among the top 10 gold producers with operations in South Africa, the world's largest source of the metal."
"'It's catastrophic,' David Davis, South Africa's top-rated gold analyst, said. '`The question is what impact this will have on Barrick's nerves and whether their appetite for deep-level mining in South Africa will dry up.'"
"Western Areas shares dropped 3.99 rand, or 9.2 percent, to 39.50 rand at 1:27 p.m. in Johannesburg, the biggest drop in a year. That cut its market value to 6.1 billion rand ($1.01 billion)."
"A container, used to hoist rock from underground, and a 6.7-kilometer (4.2 miles) steel rope, together weighing about 99 metric tons, 'bulleted down the shaft' during routine maintenance, Gordon Thompson, South Deep's manager, said in an interview from the mine. 'This is a big one,' he said. An appraisal of the damage to the mine, which contains 3,500 tons of steel, more than was used to build the Eiffel Tower, will take about two weeks, he added."
"South Deep produced 107,946 ounces of gold in the first quarter, 16 percent less than the previous quarter. The mine, which is building up to full annual production of 700,000 ounces, yielded 469,168 ounces last year. Last year, South African mines produced about an eighth of the world's gold production of 81 million ounces, according to a London-based precious metals consultancy."
# posted by Ben Jones @ 7:07 AM 
