|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
|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.
|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.
|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.
|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,
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
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
||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
||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
||The Abosso Deeps underground Mineral Resources
have been moved to the mineral inventory
Plan of the Damang mining area