Gold Fields Limited has outlined a Reinvestment Plan for its Damang Mine in Ghana, which is expected to extend the life of the mine by eight years, beginning next year.
The Reinvestment Plan entails Gold Fields investing $1.4 billion (operating and capital expenditure) over the life of the mine.
Gold Fields estimates direct employment associated with the Reinvestment Plan of 1,850 people.
Of this, 368 will be Gold Fields employees, 55 percent of whom will come from the adjacent communities; 90 will be on fixed term contracts, all from the catchment community and approximately 1,400 will be contractor employees, 60 percent of whom will come from local communities.
A statement issued by the miner recently said over the life of the mine, a total of 165 metric tons of gold would be mined, with 32 metric tons processed at a grade of 1.65 grams/ton, resulting in total gold production of 1.56 metric ounces.
Mining and processing costs are estimated to average US$3.60/ton and US$16.25/ton, respectively while all-in costs (AIC) are forecast to average US$950/ounce.
The benefits of the Development Agreement (signed between Gold Fields and the Government of Ghana in March 2016), have been key inputs into the Plan and enhances the economics of the project.
The Reinvestment Plan is based on mineral resource models that have been updated in 2016 and extensively reviewed both internally and by external consultants, namely SRK, Optiro and Rowley Geological Services (RGS).
Since operations at Damang commenced in 1997, the mine has produced in excess of 4.0 million ounces, sourced from multiple open pits.
A strategic review of Damang commenced in 2015 which identified that Gold Fields should return to mining the higher grade core of the main Damang ore body.
Investment in sustainable development projects is estimated to be US$5.0m over the eight-year period.
This will be split between education (US$1.5m), health (US$0.2m), water and sanitation (US$0.7m), agriculture (US$1.6m) and infrastructure (US$1.0m).
Gold Fields has also commenced the tarring of the road between Damang and Tarkwa estimated to cost US$17m, which is expected to have benefits for the mines, as well as local stakeholders.
The Group will also retain the optionality to expand the operation should the gold price strengthen sustainably to above US$1,400/oz.
Mining will be undertaken by two mining contractors, with negotiations currently at an advanced stage.
At this stage, the contractors are expected to be mobilised early in 2017.
A total of 165Mt will be mined over a seven-year period, with the majority of material coming from the Damang Complex (DCPB/Saddle).
Of this, 32Mt will be processed at a grade of 1.65g/t, resulting in 1.56Moz of gold production.
By Samuel Boadi