Mill to close as Gold Fields cuts costs SOUTH Africa's Gold Fields has flagged further cost cuts, a mill closure, impairments and reserve downgrades at its Australian unit, which will soon produce a million ounces per year. But the Johannesburg-based miner is upbeat about the potential to extend the life of its operations here after cost cuts. Australia is Gold Fields' main focus after its recent $US300 million ($322m) acquisition of three of Barrick Gold mines. Gold Fields chief Nick Holland last week told gold investors in the US that he was restructuring the company, which will produce more than 40 per cent of its gold from Australia, to enable it to generate a 15 per cent cashflow margin at gold prices of $US1300 an ounce. The company, whose local mines are all in Western Australia, has already cut 240 jobs at its Agnew mine near Leinster and cut 16,000 high-cost ounces from annual production there, as well as mothballing an acid leach operation at its St Ives goldmine near Kambalda to cut production by up to 40,000 ounces. Mr Holland said there would be end-of-year impairments of reserves and the asset base at St Ives, whose 418,000 ounces of 2012-13 production made it Australia's fourth-biggest goldmine. Total cash capital and operating costs at the mine had fallen from $US1900 an ounce a year ago to about $US1250 but they still needed to drop another $US150 to offset power costs, Mr Holland said. "Further cost reductions and revenue-enhancing measures are under review," the company said in slides posted with Mr Holland's speech. Gold Fields has already reduced its Australian workforce by about a quarter in the past nine months. In August, Gold Fields agreed to buy the Granny Smith, Lawlers and Darlot mines from Barrick for $US300m. The deal, which was due to close this month, will mean Australia produces 42 per cent of the company's gold, ahead of Ghana (34 per cent), Peru at (13 per cent) and South Africa (11 per cent). Mr Holland said he would focus on expanding or extending existing Australian assets rather than looking at any new areas. "Once we have concluded our deal in Australia we will have five assets in Australia producing a (combined) million ounces (a year), all of them having very significant brownfields (near mine) growth potential," Mr Holland said. I would prefer us in Australia to focus on bringing to account the near-term opportunity of those individual mines as opposed to pursuing greenfields projects. Mr Holland said he would probably close down the plant at Lawlers, which is next to Agnew, to cut processing costs. He said the two ore bodies, which are about 600m apart, would eventually be joined up to optimise ventilation requirements and underground equipment. At St Ives, a 2012 discovery named Invincible had the potential to extend the life of the mine, which Gold Fields bought from WMC Resources in 2001, he said. Mr Holland said there was significant potential to bolster an initial resource estimate of 247,000 ounces of gold at Invincible. At Agnew, there was also the potential for other ore bodies to extend the mine's life. At Granny Smith, grades were increasing and mineralised zones getting wider as drilling got deeper.