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Turnaround at Damang was sustained through 2014
Re-assessing all options at Damang across the entire mining lease to derive a strategy to drive the best cash-generative plan
The full mining lease underwent a prospectivity assessment in 2014 to identify and rank brownfield opportunities. A strike of 8km contiguous to the Damang pit provides upside potential with a further 15km of strike trending south-west toward Tarkwa reflecting a prospective corridor for ongoing near-mine exploration. Following this assessment, a three-year phased exploration programme has been profiled that will commence in 2015.
LoM extended to 2020 (six years).

Asset fundamentals

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 approximately 5% oxides, which is sourced from four open-pit mining operations and existing surface stockpiles, located on the Damang mine lease. The plant, which has a throughput of 4.2Mtpa, is being upgraded 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 (ILR). The East Tailing Storage Facility (ETSF) with additional lifts supports the LoM plan to August 2016 and then 2016 to 2020 is catered for by the Far East Tailing Storage Facility (FETSF), where permitting is already in place for the initial lifts.

    A tropical climate, characterised by two distinct rainy seasons from March to July and September to November. Average annual rainfall in the area is 2,030 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)   Intermediate to deep-level gold mine (>2,000m below surface) exploiting auriferous palaeoplacers (reefs), namely the conglomerates that comprise the Upper Elsburg Reefs of the Mondeor Formation. Historically the Ventersdorp Contact Reef (VCR) of the Venterspost Formation has been exploited using conventional mining methods.  
ENVIRONMENTAL HEALTH AND SAFETY   Damang retained its OHSAS 18001:2007 (Safety Management system) certificate following the recertification 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 FETSF.  

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 850m. 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 of a mineralised quartz vein system to a depth of 200m 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 the Rex, Tomento North, Tomento East, Tomento West and Huni areas. The initial 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 prefeasibility study continue 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 restructuring and business improvement initiatives implemented across the whole of Damang started yielding positive results in Q4 2013 and the turnaround continued on through 2014. The focus on employee health and safety, operational efficiencies, mining mix, grade management and key activity costs has transformed Damang back to commercial levels of production with a realistic time frame now available to bring additional brownfield opportunities to account.
A three year phased exploration programme has been designed to test prioritised targets that show the potential to deliver cash generative ounces to the LoM plan to replace depletion, increase flexibility and grow the reserve base. Targets are prioritised if they represent extensions to active pits or known ore bodies in reasonable proximity to the Plant and are favoured if they are hydrothermal in style due to their generally higher gold grades.
Near-mine exploration continued at Huni, Saddle and Juno South. Tomento North drilling and modelling was completed in 2014 and further infill-drilling planned to refine the geological domains and identify pay shoots is scheduled for 2015.
The Mineral Reserves at Damang increased from 1.1 million ounces to 1.2 million ounces, net of depletion, as a result of the inclusion of Amoanda and Huni Cut-back 2.
The mine re-positioned well in 2014 and remains dedicated to achieving targeted head grades and sustaining plant throughput to deliver increased ounces and stabilise the All-in Cost per ounce.
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 prioritise extraction from the pits with the highest economic value and is focussed on the Huni, Saddle and Juno areas.
The Mineral Reserves declared as at 31 December 2014 are constrained by the existing ETSF adjacent to the Damang pit, and exclude Mineral 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 continue in 2015 to determine the best business case to improve 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 compared against the existing Cut-back 2 option.

Plan of the Damang mining area

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Geographic location
Geographic location

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