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Re-assessing all relevant options that have the potential to deliver best value to Gold Fields from the asset
Confirmation of the preferred long-term plan for Damang by mid-2016
Damang will revert to contractor mining at the end of Q1 2016 while the long-term options are assessed
Building on the prospectivity assessment conducted in 2014, a continuous process of review and ranking has been developed to maximise the exploration opportunities in line with the LoM strategy
The current LoM extends to 2020 (five years)

Asset fundamentals

Asset fundamentals    
License status and holdings   The Damang concession covers a total area of 23,666 hectares. All necessary statutory mining authorisations and permits are in place for the Damang mine lease, and Abosso Goldfields is entitled to mine all material falling within the lease. Abosso Goldfields holds a mining lease in respect of the Damang mine dated 19 April 1995, as amended by an agreement dated 4 April 1996. This lease expires in 2025, but is renewable under its terms and the provisions of the Minerals and Mining Law, by agreement between Abosso Goldfields and the Government of Ghana.
Operational infrastructuire and processing capacity  

The Damang plant processes mainly fresh ore with approximately 5% oxides, which is sourced from four open pit mining operations and existing surface stockpiles, located on the Damang mine lease.

The plant has been upgraded from 4.0Mtpa to 4.5Mtpa and is a conventional two-stage grinding circuit using a SAG and ball mill combination, with pebble crusher and gravity concentration, followed by a carbon-in-leach recovery process. Gravity gold is collected and treated by the Knelson Gravity concentrators and an In-line Leach Reactor.

The East Tailings Storage Facility (ETSF), with additional lifts, supports the LoM plan to December 2016 and then 2017-2020 is catered for by the Far East Tailings Storage Facility (FETSF) where permitting is already in place for the initial placement.

Climate   A tropical climate, characterised by two distinct rainy seasons from March to July and September to November. Average annual rainfall in the area is 2,245 millimetres. Although there may be minor disruptions to operations during the wet season, there is no operating or long-term constraint on production due to climate.
Deposit type   The Damang ore body is hosted by a north to north-easterly plunging antiform, developed within Tarkwaian sediments. The main Damang pit is located close to the closure of the antiform, and all other known mineralisation is located on the east and west limbs of the Damang anticline. The mine exploits fresh hydrothermal and oxide mineralisation in addition to Witwatersrand-style, palaeoplacer mineralisation.
LoM   It is estimated that the current Mineral Reserve will be depleted in 2020 (five years).
Environmental, health and safety  

Damang retained its OHSAS 18001 (Safety Management system) certificate following the re-certification audit conducted in March 2015. Damang is ISO 14001-compliant and holds regulatory Certificates for Environmental Compliance.

Permits have also been issued for new infrastructure at the Huni Waste Dump and FETSF. An Environmental Impact Statement for the Amoanda – Juno growth Corridor project was submitted to the Ghana Environmental Protection Agency in Q3 2015 for environmental permitting.

Brief history of Damang

Late 19th – mid 20th century

Several small mining companies operated the Abontiakoon concession near Tarkwa town, leading to the sinking of eight vertical shafts and the excavation of numerous open pits. In 1882, operations at the underground Abosso mine exploited banket conglomerates to a depth of 850 metres. In 1920, Adjah Bippo and Cinnamon Bippo underground mines to the north were incorporated into the Abosso mine holdings. Abosso mine ceased operation in 1956 with recorded production of 2.7Moz at an average grade of 9.8g/t.

Late 20th – early 21st century

In 1989, Ranger Exploration (Ranger) began an investigation of retreating tailings from the Abosso mine. Following a drilling programme and subsequent feasibility study from 1993 to 1996, mining a mineralised quartz vein system to a depth of 200 metres was shown to be viable. Open pit operations commenced in August 1997 on the main pit, following the relocation of 3,000 people. Gold production started in November 1997 at the 3.0Mtpa capacity CIL plant. In 2001, Gold Fields and Repadre signed an agreement to purchase Ranger’s 90% interest in Damang. IAMGold and Repadre merged to give IAMGold an 18.9% interest in Damang and Gold Fields a 71.1% interest.

The Damang Expansion Project was initiated in 2004 to identify additional sources of ore from areas around the main pit. Following further drilling, a feasibility study was initiated to test the viability of a cut-back to extend the life of the main pit. Post approval of the necessary capital expenditure, the Damang pit cut-back (DPCB) and waste mining commenced in July 2005. A regional prospectivity study was completed in November 2005. In 2006, Mineral Resource estimation was carried out in the Rex, Tomento North, Tomento East, Tomento West and Huni areas. Amoanda Pit was finally depleted in August 2006. In 2010, drilling and Mineral Resource estimation was carried out at Amoanda North, Rex, Huni and Juno.

An updated conceptual extensional resource model was developed for the Greater Damang pit (Huni, Damang, Main and Juno) in 2011. Portions of the Damang pit down-dip extension drilling programme were completed and incorporated into the Greater Damang pre-feasibility study (PFS) with a resultant increase in Mineral Resource and Mineral Reserve ounces. During Q1 of 2011, the mine moved to owner mining and maintenance. GFG acquired the indirect 18.9% IAMGold interest in Damang and consequently holds 90% with the remaining 10% held by the Ghanaian government.

The pre-feasibility study for Greater Damang continued during 2012, following the completion of the Phase 2 drilling campaigns. Resource infill and geotechnical drilling programmes were completed on the Greater Damang Extension Project. Infill drilling and modelling of the Greater Amoanda Project was completed.

The fall in the gold price in 2013 resulted in the Greater Damang project being placed on hold, with the operation being restructured to maintain viability during the expected period of low gold price. The Damang turn around project in 2014 resulted in a return to profitability and positive free cash flow margin.

During 2015, infill drilling was completed at Huni-Saddle Bridge, Amoanda, Tomento North and Tamang with extensional drilling done at Juno East. Updates on the Damang Complex, Rex, Amoanda and Tomento North models were completed. The Damang Complex model was updated based on new drilling information, as well as reinterpretation of the existing five fault block model into six fault blocks.

Key developments at Damang

The Mineral Reserves at Damang are based on an interim LoM plan, and have decreased from 1.2Moz to 1.0Moz, mostly as a result of depletion. A comprehensive assessment of strategic options to determine the prognosis for the mine and identify the best long-term plan is underway and we expect to confirm a decision by mid-2016. The mine has a good ore body at depth under the original pit that will require a push-back to expose. Options being reviewed range from ‘Care and Maintenance’ to a significantly expanded pit and extended LoM including several options in-between
Near mine exploration continued at Huni, Saddle, Juno, Juno South and Amoanda. Tomento North drilling and modelling was completed in 2015 to better define the structural controls on the reefs. A threedimensional model covering the Damang Mining Lease is in progress and will form the foundation for the identification of new brownfield exploration targets in 2016
Advance Grade Control (AGC) drilling programmes have continued with the objective of de-risking the operational plan and keeping nine to 12 months of production within the AGC window
Mining is designed to prioritise extraction from the pits with the highest economic value and is focused on the Huni, Saddle and Juno pits
The Mineral Reserves declared as at 31 December 2015 are constrained by the existing ETSF adjacent to the Damang pit, and include Mineral Resources from the Cut-back 2 pit area
During 2015, Damang reviewed the option of owner vs contractor mining and under the current economic conditions, it is proving feasible to return to a contractor mining operation model for the foreseeable future

Plan of the Damang mining area

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Geographic location
Geographic location

Related links
›  Detailed disclosure of the West African Region in the 2015 integrated report