Good morning, ladies and gents, welcome to the Gold Fields 2018 annual results presentation. Before we get started, just a quick bit of housekeeping. Fire exits, top corner and the front door here. If you have to use them, please do so in a calm manner and meet out the front of the building. Today on stage we have Nick Holland, our CEO, and Paul Schmidt, the CFO. Nick will get up and give a quick presentation, and after that, we'll open up for questions and answers. Thanks. Nick?
Thank you very much. Good morning, everybody. Once again, Happy New Year, although it's a bit late to be saying Happy New Year. I think we should just recognize, first of all, the tragic events in Brazil. You've seen the accident with potentially up to 300 people who've lost their lives. We've also had 84 fatalities in the mining industry in South Africa in 2018. Could we just stand, have a moment of silence, please? Thank you very much. All right. The front page there is we thought quite appropriate to show you that Salares Norte, a discovery in Gold Fields, has concluded a feasibility study during the past year. This area here, where you can see all the crisscross tracks of trucks, this is Brecha Principal, which is the highest grade portion of the total reserve. This is around about a 500 m by 500 m complex.
This is standing on a hill looking down. It's a very interesting landscape. The border with Argentina is on the other side of these mountains over here, 4,500 m up in the Northern Atacama Desert. We have to go where the gold is, and there's a lot of gold over here, and we'll talk about it a little bit more later on. All right, what are the key issues? I don't want to blind you with too many stats and numbers. You can read the book at your leisure to get all of that. Key issues are South Deep went through a major restructuring during the course of 2018. We went through a process which is known as a Section 189 labor restructuring process under the Labour Relations Act.
We unfortunately had to retrench up to 1,100 employees and around about 400 - 500 contractors in that process. That was on the back of retrenchments that were done at the beginning of the year. We believe we needed to rightsize the operation, given that South Deep had not achieved production targets over a long period of time. I think everybody knows that. We had to respond. We've rightsized the cost base to where we sit today in terms of production to the run rate we had pretty much before the restructuring kicked off. That's meant that around about ZAR 800 million a year has come out of our operating cost base, and around about ZAR 400 million a year out of our capital base.
That's going to put us in a much better position to, first of all, stem the operating losses, but also to focus on short-term delivery. We've severely constrained that footprint. We've taken out a lot of the lower grade areas in the old scattered mining part of the mine. If you can recall, in the old days when South Deep was conventional, we used to de-stress above and below the ore body and then develop in and mine it. That's not what we're doing now. We're actually de-stressing on reef and opening up the ore body and mining a bulk non-selective process. We want to move more towards that into the future. A tough process. Fortunately, no one was killed. I thought at some point we might have fatalities because there was a lot of industrial action sabotage, training centers being burned down, et cetera.
Fortunately, we got through that. First time we've done something like this at South Deep. I do believe this will set us up to have a new start on the asset. Tarkwa, also a major year for them because they moved away from owner mining to contractor mining. I'm amazed that we got through that without any hiccups. Production came in slightly ahead of guidance for the year. The teams did a great job. We've done that really to reduce our cost base, given that Tarkwa is extremely sensitive to cut-off grades and given the fact that we just couldn't keep sustaining the high rate of increases that the employees were looking for. This is a model that's pretty similar now to what you'll see other mining companies doing. Damang outperformed significantly over the year.
We're ahead of plan on the project, which is really good news, they're looking for another really good year ahead of them. Gruyere slightly late. What I can say is that as we speak today, we're probably about 93% complete. We're getting close. The outstanding work is really electrical and piping. All of the stuff we need is on-site because obviously this is over 1,000 km from Perth. It's a fairly remote site on the eastern boundary of the Yilgarn. It's a long way to go. We're getting close to that now, and it really is a first-class operation. I'm sure at some point we'll be arranging a trip for people to see that. Asanko, we bought 45% in Asanko. Why did we do that? First of all, it's in a country we know well, Ghana. Been there for 25 years. We see a very prospective bulge here.
We see significant potential on Esaase, in particular, into the future. Salares Norte feasibility finished. I'll talk about that. Cerro Corona, we've extended mine life, we're looking to do that again. That's pretty important because it's one of our lowest cost producers. It's consistently outperformed. Just last year alone, it made $114 million of bottom-line cash from the back of just over 300,000 oz of gold equivalent. Really a super operation that's served us well. Balance sheet, we've taken some strain off the near-term liquidity by rolling out a term loan on the same terms. We'll talk about financing later. Dividend, of course, let's not forget that. Even though it's been a more modest year from an earnings perspective, we've still paid a dividend.
If we look at our track record over the last number of years, we've continued to outperform our cost guidance, and we've done it again for the sixth year in a row. This year, we were slightly off in the production, but I guess in the context of South Deep really losing four to five months really of production, I suppose, to come within 4% of the original guidance is not a bad outcome overall. We've got to give thanks there to the international ops who've come to the rescue there. Looking at our cash. If we look at the mine cash flow, this is what we like to show people is where's the money made, where does it go? You can see the mines in the group last year made $ 334 million. If you add back South Deep, that figure is somewhere around about $ 480 million.
The international mines made about $480 million. Very similar to what was made in the previous year from the international ops. How did we put that to work? We've got the Damang investment of $ 125 million. We've got some modest South Deep capital. We've got, obviously, the Gruyere project. This was always going to be the peak year, 2018, on the project spend, and it's proved to be. At the same time, we're getting closer to the finishing line. Salares, here's all the money on the studies and further infill drilling to prove up the ore body. Also some district exploration drilling as well to look for the next Salares around the area we're in. Obviously, interest on our debt. That takes us to about $ 132 million.
I think it's worth putting into context that over the last two years, we've spent over $600 million on growth, and we funded about 80% of that from internal cash flows. $134 million has been our net leakage. Paul and I knew this was going to be the case. In fact, it could have been worse. This is now putting us in a very strong position to bring these projects through, and you'll see later that our capital spend in 2019 is going to come down significantly. Our production is going to go up, and that will have a beneficial impact on all of the metrics. You can see over here's the capital. The green is the project capital at the top there. The blue is the sustaining. You can see that project capital picked up a lot over the last two years, now coming off.
Sustaining is also coming down a little bit as well. We're looking at a significantly reduced capital spend, as we said it would be in 2019. The balance sheet, as we mentioned, we termed out that loan. What that means is that in 2020, we have a significant amount of maturities. We've got $ 850 million net on the bond at the end of 2020, and we've also got some other loans around the group. We have an Australian loan that also matures in that period. As Paul has indicated to some people outside, we will be looking to refinance the bond and potentially also the syndicated facilities during the course of 2019 so that we can push this out. We don't envisage a huge problem with that. We've had an upgrade in our credit rating last year, which has helped us.
Obviously, the markets have got to play ball, maybe the comments by the Federal Reserve of late are going to help us to do that. It's not just terming out the debt. We've got to bring down the debt. We've invested heavily into projects. We've got to show some of the cash flow coming back, bring down the debt, pay some higher dividends to shareholders on the back of higher profits, and leave something for working capital and other things that we might need. Hedging, w e made some good money on hedging last year, generated realized gains of over $50 million, which helped to underpin the big capital spend that we had. We're doing the same in 2019. I don't think you should read into this now that this is going to be a recurring theme.
Certainly, we would be extremely nervous to be going out long, because it's a guessing game beyond even six months here. We've locked in really all of the Aussie production at a weighted price of just under AUD 1,800 for the year. There's upside potential on most of that as well in terms of the collar structures. We've also hedged just over half of the production forecast on South Deep at ZAR 617,000, and that was compared to our planning price of ZAR 525,000. That will certainly help us, particularly given that our guidance on South Deep is just under 200,000 oz at all-in costs of about ZAR 610,000 a kilogram. As you can see, putting hedges in on that sort of level is going to help to underpin that performance. Looking at the group then, overall, our production for the year, 2.04 million ounces.
That is better than the previous updated guidance we'd given of about 2 million ounces. We were able to get almost 40,000 oz more in the end, which is great. I think if you look at the Americas over here, you can see why the life extension is important, $699 all-in costs, 314,000 ounces, making $114 million of cash. We look at West Africa, before the project, $149 million of cash. Of course, Australia making almost $200 million of cash, U.S. dollar terms for the year. In Aussie dollar terms, that translates to almost AUD 300 per ounce of bottom-line cashflow. If you compare that against the other Australian producers, and we've done the analysis, we look pretty good. This is where some of the cost reporting, I think, is a bit distorted.
Others will say that their costs are a lot lower than us, but in fact, they don't make any more cash than us. I think there is definitely differences, changes in how people define their costs. What is above the line, what's below the line, et cetera. We all know cash is king. If we make the cash, the cash will tell you it's there or it's not there. Again, South Deep, of course, a very difficult year on the back of the restructuring, but we've reset the base, and we've knocked our cost down a lot. Reserves. This is the approved numbers. We don't have the mineral reserve and resource supplement ready yet. That will go out with the annual report at the end of next month.
I think importantly, the takeaways for me is that we've put back a lot of what we mined in terms of total gold reserves. Just the 500,000 oz difference. That's a big takeaway. The second big takeaway is that on the international operations, we're now sitting with about 20.5 million ounces made up of these three blocks over here, 7.5 million ounces in the Americas, 6.5 million ounces Australia, similar number in West Africa. If you look at that in the context of what we've said, that the international mines, we believe, can sustain about 2 million ounces a year for 10 years. You've got a 20 million ounce reserve to back it up. Remember, there's no Asanko in here yet. Asanko's numbers will come in the second half of 2019. We have taken a downgrade on South Deep.
There's a 4.6 million ounce reduction in their reserves. On an attributable basis, if you take out the minority interest, the BEE deal, it's just under 30 million ounces compared to 34 million ounces. That's really three areas. We've taken a more conservative view on our mining recovery factors in our stopes. That's knocked out around about a third of that reduction. We've worked on a higher cut-off grade. North of Wrench, we've taken from about 3.8 g to about 4.1 g a ton, which is meaning that essentially we will go for the better grade stuff. That's a function of the fact that the production buildup has not been honored over the last few years. We've taken a more conservative view, notwithstanding the fact that we've dropped the cost significantly. W e've also put in some geotechnical losses.
We've seen that there's a number of dykes and faults across South Deep. Two in particular that we've encountered has been the Grey Ghost dyke and the Fargo faults. We found that we've needed to put bigger bracket pillars around those dykes. We know that they exist through the ore body. We've taken a conservative view using what we know in the areas we've had to bracket as a proxy. We've applied that across the ore body. That has knocked another third out as well. Whether or not that translates into reality and time, we'll see, but I think the team have adopted a cautious approach to that. We've had this audited as well, just so that when you see the R&R report, we've had it externally reviewed this year. That's a robust process. These numbers are not just our own internal numbers.
These are numbers that external parties believe are achievable. Right. What is the global growth or exploration highlights? What we've tried to do, instead of giving you a whole bunch of slides with intersections and various colors of different lithologies, we're just going to give you some brief highlights. If you look at Australia, Granny Smith, we've grown the resource by 4.5 million ounces since we bought it, reserves by over 2.5 million ounces . We're sitting here now at about 2.3 million ounces of reserves, but we're sitting with about 8 million ounces of resource. We've got to start converting more of that resource to reserve. The focus now will be more on the infill drilling over the next couple of years, particularly as we look to convert portions of Zone 135, 2.5 million ounce block, and eventually Zone 150 into reserves.
Certainly, there's significant potential out of Wallaby still ahead of us. We're looking outside of Wallaby because strategically, we have a 3.5 million ton per annum plant that we're only putting through about 1.7 million tons a year. If we can find more to put through the plant by looking at opportunities around us, that'd be great. I'm afraid it's a long game, though. I'm not going to be able to tell you that next year or the year after we'll find stuff. I think we should work on the next five years, and hopefully we'll have something that will come in to supplement Wallaby. At St Ives, Invincible continues to grow. We've got over 2.5 million ounces to find in Invincible. We're seeing that Invincible continues at depth. It continues on strike.
We've now got Invincible South that we're developing into. We've got Invincible Far South that we're into, and we've got multiple anomalies, visible gold intersections on the 30 km Speedway trend that runs through the lake. We're also doing something different. We're going back to the old mined areas. Victory was a large complex that was mined around about 10, 15 years ago. What we've done there is we've done a seismic survey to identify structures that are very similar to the structures that we mined. That will enable us to target framework drilling, get a better color in those areas, and I think we'll find more. The best place to find gold is where you've mined gold. We're not done in this area. I'm really excited about the fact that we did the joint venture with LEX, a listed company.
That's added another, around about a third to our land package to the east. We're seeing very similar kind of structures, shear zones, which host a lot of the ore bodies in St Ives. As you know, most of the ore bodies at St Ives are found on the three parallel shear zones that run through the property. We're seeing anomalies like this replicated in the LEX property. It's a whole bunch of framework drillings going on there. I think we're going to find a whole lot of new targets for us in the future. Agnew, I really thought Agnew was going to be a dead duck a couple of years ago. Now I think it's going to be a fantastic mine for us for the next decade. Why? A lot of focus and a lot of exploration. The more you explore, the luckier you get.
Certainly, they've found an analog to Kim called Waroonga North, which is 500 m away. The beauty is we can use a lot of the same infrastructure to get in here, and that's extending further down and laterally. Redeemer, which again is an old pit we mined. We backfilled it. W e found an offset to Redeemer on the ground, and that's starting to grow to between a 500,000 oz -1 million ounce deposit. I'm hoping that we'll get an inferred resource of sorts declared at the end of this year. New Holland continues to give. In Ghana, remember that Tarkwa is a paleoplacer style ore body. Simply put a whole bunch of stack conglomerate reef packages on top of each other, very similar to the Wits Basin. What do you know about the Wits Basin? It keeps going. Similar here.
We're seeing around 3 km-5 km of additional strike, the total strike length of all of the pits here is probably of the order of 12 km- 15 km. That gives you an idea. Tarkwa has been a 20 million ounce ore body for us so far. It's truly one of the premier ore bodies on the globe. I'm very pleased that Tarkwa got a mention when Barrick and Randgold mentioned their deal. We got a mention. Good to be recognized by somebody else. Great mine. I'm pretty sure this is going to be around for a long time. Damang, there's further extensions to the north at Amoanda. I've got a slide. Also, we still have the potential to go deeper. Asanko, I've talked about. It's really about getting Esaase further up the curve but also starting to drill the targets in the area.
They've only explored around 7% of the land package, and we're seeing some good intersections on ground that we picked up. Peru, we need to go beyond 2030. We think we can. We've got a study now going on for 2040, and we should have some results on that towards the end of the year. Right. I'll go through this reasonably quickly. ESG highlights. Regrettably, we had one fatality at South Deep during the year. That said, though, we had our best ever safety year across the group, a 24% improvement on our total injuries across the group. That is the best performance for the company. If you look at these injury rates now, they're probably about 60% better than what they were four to five years ago.
We are spending a lot of time and effort on host communities, particularly in the areas of procurement and local jobs. Let me just talk about tails dams. Obviously, this is a major risk for the mining industry and one that is on our radar. We've had all of our tails dams reviewed. There's a guideline from the International Council on Mining and Metals. We are a member of that. We're one of the few companies that is a member in this country, one of the few mining companies. We've had it certified against that. If you recall the dam failure in Brazil, it was a decommissioned upstream dam. Essentially, those are dams where you build the dam on top of tailings. Okay. We only have one active upstream dam, which is Granny Smith, that we're watching very carefully.
The rest of our dams are downstream, which essentially also means you use the topographical contours around you to provide the base and the stability. That's good news. T he other thing is, Salares, of course, will have very little moisture in it because it'll be dry stack tailings. I do think the landscape on tails dams is going to change. I think you might find that upstream dams could be outlawed. I think over time, and I'm part of the ICMM Council, along with 30 other mining CEOs across the globe, we do want to move away from conventional wet tailings over time. I think that program will get more impetus on the back of not just the accident in Brazil, but there was a previous one in Brazil, and there was obviously one in Canada prior to that as well.
The other thing that's really good to see is we're able to use old pits for tailings, and we're doing that in Australia at the moment, and we'll be doing that also at Cerro Corona. That's part of the life extension exercise. At South Deep, we are actually mining the old tails to put through the plant to create some backfill while we get the underground arisings into equilibrium. That's another way of getting rid of the liability. Watch that space. Approaching the inflection point, 2019, we believe is going to be a positive year in the context of all of the work we've done over the last two and a half years. Our project capital comes down by half, as you can see here, from $290 million to $143 million.
We expect the business to turn cash flow positive in the second half, particularly as Gruyere comes into production, as we see Damang ramp up as well. That's certainly going to help us, and as that capital comes off significantly after the first half of the year, so all of those things come together. Gruyere first gold, as I said, quarter two, we start getting into the saddle area of Damang in a big way, even in quarter one, never mind quarter two. Salares, we have to work through the EIA process, Environmental Impact Assessment. That's going to take us at least until the middle of next year. If all goes well and we get approval, we could start building the project after the winter of 2020, which essentially would be around about October. That's not far away. In the scheme of our business, it's actually incredibly close.
I've talked about how the global portfolio, how the regions are now getting to critical mass. You look at the top companies around us, outside of maybe the two big ones now that have merged, you're in good company with that kind of number, even without South Deep. On Damang, I think very quickly, a picture tells all the stories. This is the Western wall. This is the Eastern wall. You can see it's come down a lot. This water at the bottom here will be pumped out. For those of you who go up to the mine for a visit at some point in the future, you'll see a very different Damang from what you see today. The bulk of our mining will be around these areas. Again, we'll take these down and get down to that center point.
Of course, it's still open at depth. We haven't found the bottom of this particular ore body. What's good about 2019 is our guidance, 218,000 oz, which is up about 40,000 oz from this year. Importantly, all-in sustaining at $800. As the grades go up, all-in cost down $400 an ounce to $1,100. The last project capital of about $69 million to be spent. We're looking at the unconstrained. There's at least 2 million ounces here. There's a resource of over 4 million ounces remaining. That's, I think, conservative. On Amoanda, which is on the same trend, Amoanda is on the same trend as this up to the north, w e are seeing further extensions, and I can show you here. There's a cross-section. We finished mining that pit. We're mining that pit. We'll be getting into here.
We're seeing further extensions over here, and you can see if you look at a plan view, there's pit five over there. We've done some drilling there. That looks promising. Done some drilling there. Drilling to be planned here. That whole area there is about 1.2 km of strike, which is longer than what the whole pit is. This has given us somewhere around about 300,000 oz-400,000 oz. There's potential here for the same again over time, which is not in our numbers. On Gruyere, you can see a picture of the bottom there of a lot of the plant construction points. There's the tails dam in the background. These circular tails dams are not unique to us. It's quite a commonly used methodology in Australia. We're getting close, as I've mentioned. Our total forecast on the project is $621 million.
If you look by the end of the year, we've spent most of that. We're getting close to the end of the spend. We're still good for that number as we speak. As I say, we'll look to finish the project and ramp up in the second half of the year. We've given guidance of around about 118,000 oz from a total project basis, of which our share is around about 59,000 oz for ourselves. The remaining project capital there, $129 million. That's 100% basis out of the $621 million. As you can see, we've spent about 80% or so by the end of the year. Remember, it is a 12-year life. We've upped the production to 300,000 oz a year. We were able to do that because we put in a ball mill that had spare capacity.
We're taking the annual throughput from 7.5 million tons a year to 8.25 million tons a year. At the same sort of grades, that'll give you higher production, and it'll come in with costs of just over $1,000. Now bear in mind, the spot price today is $1,800. That's not a bad almost $800 an ounce margin on this project with significant upside potential in the resource and the inventory around us. Nearly there. Downer have started mining, which is the contractor that we're using. They've done all the initial strip, and they've already stockpiled about 120,000 tons of ore. I think when we do commission the plant, the ramp-up hopefully will be reasonably quick. All right. Salares, I've mentioned a lot of this already. The feasibility study was finished. Brecha Principal and Agua Amarga, again, there's that photo again of Brecha Principal.
Agua Amarga is just to the back here of that. What are we looking at? 11.5-year life, a m aiden reserve declared 21 million tons at 5.1 g gold. To get a 5 g open pit anywhere in the world is unique. Now, normally, open pits are like between 1 g and 2 g if you're lucky. This is 5 g. We've got a silver credit, which is good and bad. Good in the sense that it gives us a higher equivalent gold reserve of 4 million ounces. Bad in the sense that we have to put in a separate process flow to capture that. Otherwise, we'll suppress the gold recoveries. It's Merrill-Crowe process, your classic zinc precipitation, commonly used in the industry, been around for years. T he tails from that go through a conventional carbon-in-pulp process.
Filtered, compressed tails, and then on to the tail dam, which is built on the waste. The waste would be the base, dam on that, lined with sufficient bunts all around it. It's probably over-engineered, but I don't think it's going to be a big risk. It is front-ended because what we're going to do is we accelerate the mining. Why do we do that? Because it's the best economic outcome to try and mine as quickly as you can. You probably mine over around about seven years. You stockpile, and we've got enough space to stockpile, and then we preferentially feed the higher grade through. That gives us the best economics. Notwithstanding obviously, mining quicker gives you a working capital investment. The higher grade up front more than offsets that.
We've done zillions of iterations of these numbers over the last year, so we're pretty confident. Good project. This will be in the lowest quartile of costs. As you can see over life, we're talking about $545 an ounce. If you include the upfront capital, $785. This can work at much lower gold prices. The reserve is very inflexible to lower prices. This holds up at significantly lower prices. Capital of $834 million, that's in real 2018 quarter four terms. As I say, over the first number of years, we'll get about 450,000 oz or so over the first seven years, and your cost will be somewhere around about $465 an ounce. It'll be a short payback, 2.2 years, IRR of about 25%, NPV of $650 million.
This is recognized globally as one of the top discoveries in our space, I can assure you there are no shortage of other gold companies that would love to get their hands on this. Obviously, we have to get the EIA process complete. We've got to work out a funding plan because it is a lot of capital to spend. We'll have to make a decision, do we go on our own or do we go with a partner or do we do some innovative financing structure that can take the sting out of $800 million being spent over two years? That's going to be the job we have to do. On-site diesel power because we're far from the grid. We've got water secured. We've got three times the water we need in surface boreholes about 12 km away.
I wouldn't let the guys proceed with the study without that, because if you don't have water up here in this dry, arid area, you have no project. You can have the most wonderful grades, but no water, no mine. We had to get the water. Took two and a half years to get the water discovered and permitted. In fact, even more, three years. I'm glad we got that done. That's where we stand on Salares . Here's a cross-section. Here's the Brecha itself. Brecha is basically fluids coming up under extreme pressure and then being broken up and being disseminated back in here. You can see the high-grade areas are the purples and the reds, then the orange, then the low-grade areas are the yellow. Here's Agua Amarga.
That's a flatter ore body that sort of runs. If you could see this 3D, it doesn't quite run through it. It runs alongside it, behind it. That's in front over there. That's about 500 m. This is probably about 1.5 km, 1.7 km in total. Some people have said, "Well, okay, it looks good, but is it enough to keep going or to start?" Besides the fact that it's a 25% return, here's Salares over here. This is a 20 km distance. The green and the red are properties we either own or we have options on. We've got some interesting drill results in some of these properties. This has got all of the potential to be a camp.
Very similar to other high sulfidation, epithermal style ore bodies that have been discovered and mined in this whole Maricunga belt that straddles Chile and Argentina and many mines, and you will know them if you look around. It takes time. We are spending about 40% of our budget this coming year on drilling some of these targets, so we can add to that 4 million ounce reserve base. It will take years. It's not a one-year journey. All right. I'll leave these for you to go through. Here's the tons treated, the gold grade, all-in costs. The tax regime is you write your capital off over life. Tax rate is 30%. There's a 1% third-party royalty, and there's a 0.5% royalty based on mining profits to the state.
Hopefully, this gives you enough to try and model this out and do your own numbers if you so wish. Asanko, I've talked largely about what we're trying to do here. Esaase is up here, and Nkran, Dynamite Hill, Akwasiso are down here, the plant's down here. This is the potential that exists in the north here. Of course, we've got 30 km of distance between Esaase and the process plant. Process plant can do about 5 million tons a year. We're quite pleased with the work they've done in getting that process plant to where it is. It's in pretty good shape. Recoveries are good, + 90%. Processing costs are pretty good. They benchmark well against what we know. I think we've got to find what is the best solution here.
What it comes down to is if Esaase is going to be quite large, let's assume for argument's sake, it's going to be a 3 million ounce plus ore body, significant tons, then you may decide to do a conveyor option down here. If it's going to be smaller and you go for higher grade but lower tons, then it might be more suitable for a trucking solution down. Trucking in Ghana, 30 km is by no means impossible. Obviously, you have to clear away some jungle and trees and so on, but it's not impossible. We're looking at those options. The idea is we'll come back in the second half of the year with our joint venture partners and figure out the best way for us to go forward. Here's a photo of Esaase. I was up there in December and sort of stood up the top here.
This is the ramp going up. The one thing we found when we did the ramp, that was all mineralized. When we got to the top, the ore body was not supposed to daylight, but we did some grade control drilling, in fact, the ore body daylights. You get mineralized intersections, which are quite good all the way down. You can see it's very soft oxides to start with. It's going to be fairly cheap mining for us. There's the ROM top pad over there, so it comes down here. It's about 100 km north of Damang. F rom there, it goes on the road at the moment. This year, we're going to do about 1.5 million tons out of Esaase. That'll go on the road as we look for longer-term opportunities.
All right, South Deep, I think I've talked about most of this up front. If you look at the beginning of the year and the end of the year, this is actually what we've done in totality. We started the year 2018 with almost 4,000 employees. We ended with under 2,500 because there was other restructurings too. Contractors, we started with 2,300. We ended with 1,700, but in fact, by quarter one, quarter two, that figure will be 1,500. We'll be 4,000 in total from something like 6,200-6,300. That's a big reduction in people. We've obviously cut the fleet. Having too much fleet can be a hindrance as opposed to a benefit. From 98 to 66.
What Martin is doing is, which I think is very sensible, he's going to bring them out the mine, he's going to have them locked up, I think the key will be somewhere in his top drawer. Nobody else will be able to get to it. That will enable us to recondition, refurbish a lot of that fleet and stop spending a whole bunch of money down the road on buying new fleet. It's going to have the added benefit of reducing further capital, but at the same time, better focus on short-term maintenance and operating. If you've got less to play with, you're going to be more careful with how you deal with it. Low-grade sections, as we mentioned, have been taken out. That is a big footprint we've reduced.
That has meant that we can take the south shaft and actually turn it into a single shift shaft without any services. The backfill pipes have to go down various water reticulation, et cetera. Cuts a lot of the costs out. The new mine development, we were ahead. We're quite happy that we could take a breather while we consolidate our position. ZAR 800 million is out of the operating costs, about ZAR 400 million out of capital. We're going to work on a basis here. We earn the right to spend from here. Let's get short-term delivery. We earn the right to spend and invest further. That's the way we'll move from here. Key enablers, these are the things that will make the difference. These are the lead indicators. Backfill, i f you don't backfill, you can't mine. You have to backfill.
Ground support, you have to make sure your ground support follows on. Improved drill and blast. What we mean here is actually making sure that it's per design and that we create nice cavities, nice smooth hanging wall, side walls, because if you don't get that right, it makes it hard to do ground support. It makes it hard to mine from there because we use that platform to create the open stopes. Fixed infrastructure, we've got to keep an eye on the fixed infrastructure, make sure that the shafts, water, reticulation, power, tips, boxes, ore passes, look after all that stuff. Improve fleet availability and utilization. By pulling it back, I think we'll be able to achieve that. Flat organizational structure we've moved towards. Performance management, making sure people understand what they got to do and deliver it. Those are the key things. Right.
For this coming year, we're looking to get up to as high as 7% higher than what we achieved in 2018, as you see those growth projects. It is a tale of two halves. The capital will come down in the second half, the production will go up in the second half as projects come through. All-in sustaining then, around about $ 980-ish, all-in costs around about $ 1,075, but as I say, tale of two halves. Focus areas, South Deep, we've talked about. Gruyere first gold quarter two, let's ramp it up. Damang, let's ramp it up. Asanko, let's work out the longer-term solution for a very exciting addition to the portfolio in Salares. Let's advance the detail engineering. Let's do as much of the planning work up front. That'll reduce the cost and time later.
Come up with a funding plan, get the EIA process done, and then we'll see where we stand. Just briefly at the end, I'll leave this for you to read. We are a member of the ICMM. Why is this important for us? This is the cornerstone of how we run our operations. With focus on 10 sustainability principles, seven position statements, focusing on health, safety, environmental stewardship, stakeholder management, human rights, diversity, you name it. We report on those things, and we have them externally assured, and you'll see that when you read the annual report. Good. I think that's probably as much as we should say, and then I think we can leave it to any questions that people may have. Thank you.
Questions here, and then we'll take from the conference call webcast. Yatish. Yeah, it's coming.
Thanks, Avishkar. It's Yatish Chowthee from Macquarie. Nick, three questions, two on South Deep and one on Salares . Just quickly on the South Deep slide that you put up on slide 25. Some of those bullet points we've seen on numerous occasions, and perhaps also directed to Martin is, although you've done the restructure, what confidence do you have in the current employees and management on the mine to actually for some of those points to actually materialize? Things such as improved fleet availability and utilization has always been a recurring theme. Fixed infrastructure, t hese things have been there for a while. What makes it different now? Ju st secondly, on South Deep, when we talk about the international operations, a lot of companies, including yourselves, talk about assets being a $900 all-in sustaining cost number.
If you look at South Deep, what would be a long-term all-in sustaining cost number that you could provide us with?
Well, I'll answer the second question. I think Martin is here, so I think it'd be good to let him give his perspectives on the first question, if you're okay with that. Look, we want to get South Deep down to $ 900 as well. That's the longer-term strategic goal of this group, and it's stated in the annual report from last year, and I think you'll see it again in the annual report for 2018. That's where we need to get to because gold prices will be volatile. Whilst people may be talking gold prices up, over 20 years you know that they'll go up and go down. We think that's the minimum or the maximum amount of spend per ounce we need any asset to be at over time. That's no different. That's ideally where we'd like to get to.
In terms of the initiatives, Martin will talk to it now. I guess it's focused on the execution side that we're tightening up. We've always known what we had to do with the execution, and Martin's got a number of particular initiatives that he's putting in place, and maybe we can just give him a minute or two to talk about those.
Thanks for the question. It is an old story, I think the difference is this time is the nature of the restructuring. We've taken very bold steps to completely relook at the business. We started the early part of last year looking at senior structures on the mine and followed that with restructuring at the bottom. I think we've taken complexity out, taking a lot of the low-grade areas out. We talk about infrastructure. A key component of our infrastructure is the south shaft which now will only be used for servicing. It frees up time to maintain and look after that properly. I think through our selection process, one of the focuses was fewer better people. We've tried to retain the better people in our teams with better capability.
My past experience and what we're seeing now is we take complexity out. Taking 30% of your fleet out allows a lot narrower focus. In supporting that, we've brought in two organizations, an Australian organization on maintenance specialists to help us get the right focus on particularly the fleet maintenance, but all the maintenance across all the infrastructure. Coming out of the restructuring, we've got a big drive on what we call the frontline productivity intervention supported by a company called OIM, where we're working with teams to get the self-directed work principles embedded. Nick spoke about the performance management stuff, getting teams to take charge, understand how their objectives cascade or filter up to deliver the organization's objectives.
A ny pushback from the Aussies coming in?
Any?
Any pushback from labor or organizations that the Aussies are now coming in to help fix South Deep?
It's three people that have come in from Australia, three consultants that are helping us put a maintenance management system together. They're in for a very short duration. This isn't a long-term thing, just helping us build the background. I think in terms of organized labor, as much as it was fairly acrimonious during the restructuring, we built up. I think it all ended well. We've worked well with the national and regional structures of the National Union of Mineworkers. I think they've shown great maturity, helped us broker a deal towards the end of the year. One of the conditions of the settlement agreement was renegotiating a host of our collective agreements. That's progressing well, and it's progressing very constructively, I think.
Okay. Thank you. Sorry, Nick, just the other question on Salares Norte. On the $ 850 million CapEx that you've indicated to us, on the processing side of things, will the processing plant be built on a modular basis given that you're going to transition from oxide transition to sulfide? At some point, is there going to be another bit of CapEx coming in as the sulfide ores come through?
Just to be clear, there's no sulfides in here. This is only oxides. There is a sulfide potential ore body at depth. I think the thing there is we would need significant modifications to the process configuration to deal with that. To be frank with you, I'd rather go out than down, at this stage. I think if we can stick to oxides, that'll be better. To answer your question, though, it's not a large plant. 2 million tons a year is not big. You look at Tarkwa. Tarkwa's 13.5 million tons. Gruyere's gonna be 8.25 million tons. 2 million ton is not big. Yes, we have done it on a modular basis. If we wanted to put in another line, we could do so.
If we're lucky on the exploration side and we could see in time, let's say for argument's sake, I'm not saying there is, but if there was 8 million ounces here, then clearly we'd have to look at whether in fact instead of mining that over 25 years, whether you bring it forward, you get economies of scale, et cetera. I think that is for another day. Just to be clear, no sulfides in here. The plant is adequate. There's no further capital required to deliver what we've said here. This is all in the study.
Okay. Thank you.
Adrian?
Thank you. Mr. Holland, is this my turn?
No. You can carry on. It's fine. Carry on.
You can carry on, Ruby. You're in.
Yeah.
Can I go?
Yeah.
Mr. Holland, you mentioned that this year you would be refinancing your long-term debt. It needs to be pointed out that non-current liabilities went up $ 340 million from the year before. I'm assuming that the portion that you intend refinancing is the $ 1.587 billion from the years before. What are the current arrangements for repaying that, and to what extent do you intend extending the terms of payments? I'm assuming that's the refinancing portion you're referring to, since it's highly unlikely that you'll get a better rate of interest.
Ruby, we're going to refinance the bond. There's $850 million outstanding on our bond, our U.S. dollar bond. That will be done during the year. We also have a term loan and an RCF facility of about $1.27 billion. That will also be refinanced. We're looking to do a minimum of five years. We'll extend the maturities out to around 2024, 2025. That's on the full amount. You refinance the whole package. The bond obviously is totally drawn because that's the way the bond works. On the loans of the $1.2 billion, about $500 million-$600 million is drawn off the group debt. That will be refinanced. We refinance the whole package. That's how you do it with the banks. You don't only do it on the drawn portion, you do it on the whole package that they give you.
We'll be looking to refinance the $875 million, and we'll be looking to refinance the circa $1.2 billion-$1.3 billion of bank debt.
To extend your answer, does that suggest if you are unable to refinance, you would have difficulties or challenges, as they now say, in repaying within the current term?
No, there's no issue with refinancing, Ruby. We've got other facilities that we could draw down to pay those if we had to. We intend refinancing this year. There's no issue with refinancing.
Thank you.
Okay, Adrian.
Adrian Hammond, Standard Bank. Morning, Nick. Three questions, none on South Deep.
Thanks.
Just a bit of a more macro question. We've seen four of the top gold producers do mergers in the last six months, and then there was speculation around you and AngloGold merging. What is your view on consolidation now? Do you think that brings value for shareholders, and have you considered any opportunities that could be realized if you were to merge with someone like AngloGold?
I think it's interesting that we are seeing a flurry of mergers, and I think it is going to be a very active year, and there'll be more. I think a lot of it comes back to many of the things we've been saying over five years, is that there's a dearth of new discoveries, projects are not being built, the production profiles of the major companies are in decline, et cetera. If you look at that against the backdrop, the capital has dried up. It seems when you tick off all the other alternatives, that's what you're left with. I'm not surprised we're heading there.
I believe that we saw this coming a few years ago, we said, "Let's look at ourselves, and what have we got to do to make sure we're well positioned for the future?" We took the conscious decision in 2016 that we're going to run this company cash negative for two years to actually build a pipeline of better projects that will give us life extension and give us growth and give us better costs. I think you're seeing that coming now. We're sitting in a position where we've got 10 years of 2 million ounces or even more. I mean, Salares is not in those numbers. If Salares is done, we're beyond that. That's even before South Deep. You've seen the reserve position. I think that'll grow some more. We don't feel compelled to do anything except focus on our projects.
The other thing with big deals, I remember when Gold Fields was formed in 1997, I was part of the team that formed the company, it took us three to five years to bed down the culture between the old Glencore and the old Gold Fields of South Africa. It's not easy. These big deals often don't have synergies. You look at some of the big deals being announced now. I mean, how many mines have they got? They've got far too many mines. They are going to have to offload assets. They might think that people are going to pay them big numbers for those assets. Time will tell. They won't offload the best assets. Now they'll offload the ones that are running out or that have big reclamation liabilities or need significant capital input.
There will be people who will step in, but at what price? I'm not going to comment on any speculation about what certain people think we're going to do. We don't respond to speculation on specific potential transactions. Just to say, our focus is delivering our strategy that we've set out and started with. In fact, we started the strategy in 2012 when I stood up in Australia and said, "The industry is focusing on the wrong metrics. We've got to focus on making money, and not just on ounces on the balance sheet and growing production, et cetera." Our steps in 2016 are a natural extension to that process. We're quite comfortable, Adrian, to be where we are, and let's deliver this value and see what it means for Gold Fields going forward. Never say never.
I mean, you can never say you will never consider anything. It's not our focus right now.
Something just a bit more specific. What is the free gold percentage at Asanko, and what are you finding at Esaase relative to the core pit? For Paul, your AISC guidance to sustaining cost guidance for this year is the same as it is last year, despite Damang, Gruyere, Asanko coming into full swing. Why is that the case?
Look, there's obviously pluses and minuses. We have increases in costs in Australia. Costs have gone up in Australia because of deeper mining at Granny Smith. Also, it's a particular year at Granny Smith where we're into a low-grade area. The grade we're mining this year is, I think it's an aberration in the longer-term grades at Granny's. We've finished mining the higher grade Invincible pit, albeit we've got one more stage to go, which is small. That had high grades. We're still transitioning into the underground. A lot of the grades we're getting now are development grades as we open up stops, which are lower. St Ives is more in a transition. At Agnew, we're building a camp and a power station that will have a good payback and lower our costs because we were actually using a campsite in Leinster, which is quite some kilometers away.
Now we've got an on-site camp, which we own. There's $30 million of non-recurring capital going into Agnew. I think a lot of those things are impacting the cost. Paul, I don't know if you want to add anything. Those are the main ones.
Mainly in Australia, yeah.
Only Australia. Some of those will be non-recurring. Some of them are a function of increased depth. Clearly, as Granny Smith gets deeper at Wallaby, we know that the cost will be higher, but we've got a double whammy this year with the lower grade. As we get into the core of Zone 110, 120, we think the grades will pick up potentially 0.3 g- 0.5 g a ton, and that'll make quite a difference on that. Again, it's quite difficult to look at the numbers for the whole year. In the second half, I think you'll see a step change down. Thank you.
On the free gold there at Asanko.
Free gold. Sorry. Yeah. Gravity gold going through the plant is probably around about 40%, so there's a fair degree of gravity. We're very early in the stages of mining Esaase, but the bulk metallurgical test work is showing we'll probably see similar gravity gold. The guys at Asanko have seen this, so they have got the Knelsons in place so we can capture this. If anything, I think the potential of the grade here is quite good for us to improve. Look, the costs are still high because they've got a big strip still in Nkran, which is the bulk of the ore. As that moves out and we transfer more of the center of gravity to Esaase, we'll see lower grades, higher costs. It is in transition.
I think you're going to see by the time the end of the year comes, Adrian, we're going to be giving you a longer life, different plan. We didn't buy this mine for $1,150 cost. That is not our strategy. We bought this because we can see the potential for this to hit that $900. That's where we see this. Remember, we came in at a situation where the company was under significant duress, needed to refinance the facility. It had come down from almost $1 billion to something like $180 million we came in. No, we do see long-term value. I'm sure by quarter three we'll be able to give you something more concrete on this.
Thanks.
Thank you.
Can we take any questions from the conference call, please?
No questions on the conference call.
Okay, thanks.
Two questions, Nick. One is Eskom. What does Eskom mean for you people looking forward into the future? You haven't mentioned that so far. Secondly, it's now 12 years you guys have been in South Deep. Does there come a point where you say enough's enough?
Yeah. I think the second question I'll answer first. Spot on. We've asked ourselves that question and our board has asked us that question. I would say, had we not gone through what we've just gone through, this major restructuring, which we've never done before, probably the answer would have been, "It's just too hard." I think given what we've gone through now, we've significantly reduced the cost base, we've constrained the footprint, we feel that we've got to give this a go. That's not to say that that means we can continue just putting money into this month after month. I have no appetite to do that. I'm also a shareholder in this company. If we're going to have a repeat of that, there won't be a future. There has to be a step change, and soon. That's on that one.
On Eskom, yeah, it does worry us. The silver lining, of course, the fact that we're mining, our mining plan this year is premised on about 100,000 tons a month. We've got installed capacity of 330,000 tons. The silver lining in all of that is we can move things around. We can schedule hoisting in different times and stockpile underground. We can campaign mill through the plant if we have to. I think we can work around it, provided we stay at the current level. If we go to stage four, then we're going to be in trouble. I think the whole country's going to be in big trouble. What are we going to do about it? Look, we saw this coming, and we worked on a renewable solution over the last two, three years. We paused on that given the restructuring we were doing.
We do have a solution that could provide up to a quarter of our power needs through solar at lower costs over the fence. No sort of capital to us. I think we're going to dust that off now and crank that up again. In the short run, we can schedule things, and if we have to bring in additional power by renting in units, whether it's gensets, whether it's mobile units, we'll do what we have to do. We've got a multi-pronged strategy. My feeling is, though, this problem with Eskom is a big problem. It's not going to be solved quickly. I think the silver lining again here is finally we're going to start getting renewables being taken seriously by the government because they're in trouble.
I think someone was saying this morning, all of a sudden, permits are now being given more quickly than what they were in the past. I think the solution is that half of Eskom's base load is way past midlife. It needs to be decommissioned over the next 10 years. Nuclear is a pipe dream. It's going to cost far too much money, and business is going to have to create their own solutions. If we wait for the government to fix Eskom, we're going to be waiting a long time. We're going to have to fix our own situation. I think we're going to move aggressively over time. Look, we got 60 MW we need. We are one of the big users. 60 MW is huge.
It's not that Eskom's going to blow up, but I think we're going to have to get used to the fact that we're going to have less power, step change down in power than what we had before, and we've got to bridge the gap. We can't wait for that.
Okay. Any last question in the room? If not, media, the roundtable starts at 11:15 A.M. on the first floor. Otherwise, thank you for your time. We'll see you in six months.