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Damang

Re-assessing all options at Damang across the entire mining lease to derive the best cash-generative plan going forward
Highly prospective mining lease undergoing prospectivity assessment in 2014 to identify other on-lease positions and brownfield opportunities
LoM reduced to 2019 (six years), due to the exclusion of Damang Pit Cut-back 2, which is not viable in its current configuration and at $1,300/oz gold price

Asset fundamentals

General location
Damang is located in south-western Ghana, approximately 300 kilometres by road west of Accra, the capital, at latitude 5°11’N and longitude 1°57’W. The Damang concession lies to the north of and joins the Tarkwa concession, which is located near the town of Tarkwa. The area is served by access roads with established infrastructure, and a main road connects the mine to the port of Takoradi, some 90 kilometres to the south-east.
Licence status and holdings
The Damang concession covers a total area of 25,016 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 infrastructure
The Damang plant processes mainly fresh ore with oxides, which is sourced from four open-pit mining operations and existing surface stockpiles, located on the Damang mine lease. The current plant throughput is 4.0 Mtpa.
Climate
A tropical climate, characterised by two distinct rainy seasons from March to July and September to November. Average annual rainfall near the site is 2,030 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.
Life of Mine (LoM)
It is estimated that the current Mineral Reserve will be depleted in 2019 (six years).
Environmental/health and safety
Damang retained its OHSAS 18001:2007 (Safety Management system) certificate following the re-certification audit conducted in June 2012. 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 Far East tailings storage facility.

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. By 1956 Abosso mine ceased operation 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 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 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. Following the approval of the 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 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 Greater Damang pit (Huni, Damang, Main and Juno) in 2011. Portions of the Phase II drilling programme were completed and incorporated into the Greater Damang PFS with a resultant increase in Mineral Resource and Mineral Reserve ounces. During Q1 of that year, the mine moved to owner mining and maintenance. Gold Fields Ghana Limited acquired the indirect 18.9% IAMGold interest in Damang and consequently holds 90% with the remaining 10% held by the Ghanaian government.

2012 saw the continued pre-feasibility study for Greater Damang following the completion of the Phase ll drilling campaigns. Resource in-fill and geotechnical drilling programmes were completed on the Greater Damang Extension Project. In-fill 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. Consequently, the current LoM has been reduced to six years.

Key developments at Damang

The Mineral Reserves at Damang decreased from 4.1 million ounces to 1.1 million ounces, net of depletion, as a result of the exclusion of the Main Pit Cut-back 2, lower gold price and higher costs
The mine is in a transitional phase dedicated to recovering targeted head grades and sustaining plant throughput to deliver increased ounces and stabilise all-in cost
Advance Grade Control (“AGC”) drilling programmes have continued with the objective of de-risking the operational plan and keeping 9 to 12 months of production within the AGC window on a rolling basis
Mining is designed to extract the pit areas with the highest economic value and is focused on the Huni, Saddle and Juno pits
The Mineral Reserves declared as at 31 December 2013 are constrained by the existing east tailings storage facility (“ETSF”) adjacent to the Damang pit, and exclude resources from the Cut-back 2 pit area, which are not economically viable in the current configuration at US$1,300/oz
Re-assessment of all options across the entire mining lease will take place in 2014 to determine the best business case to deliver cash flow. This will include potential extensions to the Amoanda and Tomento open pits, testing potential at Nyame and Chida, as well as a review of underground options to compare against the Cut-back 2
The Abosso Deeps underground Mineral Resources have been moved to the mineral inventory

Plan of the Damang mining area

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Geographic location
Geographic location

Related links
›  Regional overview