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West Africa Region

Gold Fields holds a 90% attributable portion of the Mineral Resources and Mineral Reserves for Tarkwa and Damang, with the remaining 10% held by the Ghanaian Government as a free carried interest.

West Region
Operation
Damang Gold Mine
Mineral Resources
6.0Moz
Mineral Reserves
1.7Moz
  • Significant 72% increase in Mineral Reserves year-on-year and nominal improvement in Mineral Resources
  • Development Agreement (DA) concluded between Gold Fields and the Government of Ghana for both Tarkwa and Damang in Q1 2016
  • Damang Reinvestment Project (DRP) approved by Gold Fields in October 2016, defines the new LoM plan with eight-year life
  • Intensive waste strip programme in Damang Pit Cut-back (DPCB) is required to open up the main higher-grade Damang ore body
  • DRP utilises contractor mining with the primary contractor mobilised in the Damang Complex and a second contractor mining the satellite pits
  • Independent power generation (Genser) commissioned in 2016 and being optimised for consistent delivery
  • The unconstrained option entailing a maximum cut-back to access all the DPCB2 resource ounces remains a future opportunity
  • Investment in exploration continues to assess resource extension opportunities to current ore bodies and to target additional high margin satellite deposits that can increase site flexibility and supplement mill feed
  • The current LoM extends to 2024 (eight years)
Operation
Tarkwa Gold Mine
Mineral Resources
9.1Moz
Mineral Reserves
6.1Moz
  • Owner-operated, high-volume, grade-driven surface operation
  • Mineral Reserve grade from open pits is stable year-on-year at 1.24g/t (1.25g/t 2015)
  • Maintenance of capital waste strip to secure a steady flow of high-grade ore to the CIL plant remains a priority at Teberebie, Akontansi and Pepe pits
  • Independent power generation (Genser) commissioned in 2016
  • Focus on maintaining and improving high mining and processing efficiencies
  • Brownfield exploration focused on the search for oxide ore sources, hydrothermal style mineralisation and additional palaeoplacer opportunities – PFS on the Kobada Hill hydrothermal prospect could lead to a starter pit in H2 2017
  • The current LoM extends to 2031 (15 years)

Tarkwa

Despite the lower gold price negatively impacting the extent of the final pit shell geometries, the Mineral Reserve grade from open pits is stable year-on-year at 1.24g/t.

Asset fundamentals

  Asset fundamentals
  General location     Tarkwa is located in south-western Ghana approximately 300km by road west of Accra, the capital, at latitude 5°15’ N and longitude 2°00’ W. The Tarkwa gold mine is located 4km west of the town of Tarkwa with good access roads and an established infrastructure. The mine is served by a main road connecting to the port of Takoradi some 60km to the south on the Atlantic coast.
  Licence status and holdings     The Tarkwa mine operates under mining leases covering a total area of approximately 20,825ha. Five mining leases, dated 18 April 1997, cover the Tarkwa property, while two mining leases, dated 2 February 1988 and 18 June 1992 respectively, cover the Teberebie property. The Tarkwa concession mining leases expire in 2027 and the Teberebie property mining leases expire in 2018. Application for an extension of the mining leases has been applied for and all required fees and documentation submitted to the Minerals Commission of Ghana. There is no reason to expect that these will not be granted. All necessary statutory mining authorisations and permits are in place for the Tarkwa Mine Lease and GFG is entitled to mine all material falling within the lease.

Four large open pits currently exploit the stacked narrow auriferous conglomerates, similar to those mined in the Witwatersrand Basin of South Africa.
  Operational infrastructure
and processing capacity
    Ore is processed utilising a conventional CIL plant, with a gyratory crusher feeding a SAG mill and ball mill. Gold is recovered from solution by electro-winning and smelted in an induction furnace. Current plant capacity is 13.5Mtpa.

LoM tailings deposition requirements are catered for in the short term by wall raise sequences at the operating TSF 1, 2 and 3 facilities and in the medium term by TSF 5 whose construction commenced in 2016. In the longer term, LoM tailings deposition requirements will be catered for by planned TSFs 4 and 6.
  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 2,245m. 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 open pit surface operation currently exploits the tabular auriferous conglomerates from four open pits – Pepe-Mantraim, Teberebie, Akontansi and Kottraverchy.
  LoM     It is estimated that the current Mineral Reserves will be depleted in 2031 (15 years).
  Environmental, health and safety     Tarkwa retained its ISO 14001 environmental management system certification following an external audit during 2015. The mine also retained full compliance to the ICMC, as well as OHSAS 18001 in June 2014 respectively.

Brief history of Tarkwa

Sinking of the Abontiakoon vertical shaft was completed in 1935 and a central mill with a capacity of 30ktpm was constructed in the following four years. Several small mining companies operated the Abontiakoon concession, but in 1960 all workings were abandoned and allowed to flood.

In 1961, production restarted under the State Gold Mining Corporation and in 1963 the Tarkwa mines were renamed Tarkwa Goldfields Limited. The Apinto Shaft was sunk in the mid-seventies.

GFG signed a management contract with the Ghanaian Government to operate the mine in 1993, and in 1996 completed a feasibility study on an open pit/heap leach operation. In 1998, the initial Tarkwa Phase 1 development was completed for an open pit operation mining 14.5Mtpa, including 4.7Mtpa of heap leach feed ore. In 1999, the Tarkwa Phase 2 expansion was completed to increase the mining rate to 20.7Mtpa and heap leach feed ore production to 7.2Mtpa. All underground operations and the associated processing plant ceased production in this year. In 2000, GFG acquired the northern area of Teberebie and mining production was increased to 36Mtpa.

Tarkwa implemented owner mining in July 2004 and commissioned a CIL plant with a name plate capacity of 4.2Mtpa in October 2004. The expanded CIL plant was commissioned in January 2009 and a design throughput of 12.3Mtpa was achieved in September 2009. Conversion to owner maintenance was completed in 2010.

In 2011, GFG acquired the 18.9% IAMGold interest in Tarkwa and now holds 90%, with the remaining 10% held by the Ghanaian Government. At the end of 2013, all heap leach operations ceased.

The CIL plant capacity was increased to 13.5Mtpa late in 2014.

Key developments and material issues

  • World-class, low-cost surface mine with a 6.1Moz Mineral Reserve and 15-year life (nine years mining, followed by processing of the surface stockpile and South Heap Leach material) that remains strongly geared to the gold price – strong potential for leveraging resource ounce conversion and driving larger pits with high gold prices
  • Mineral Resources decreased by 4% and Mineral Reserves by 10%, mainly from a US$100/oz lower gold price and mined depletion
  • Reserve grade from open pits remained stable year-on-year at 1.24g/t (1.25g/t 2015)
  • The 60Mt of SHL ore at 0.4g/t for 771koz processed at the end of mine life remains value accretive, especially with the operating cost benefits delivered by the Genser gas power generation project
  • On-lease palaeoplacer and hydrothermal style exploration continues with the intent of defining new higher-grade ore sources from the hydrothermal prospects
  • Kottraverchy underground potential is undergoing assessment to profile any suitable options to turn the underground extensions of the palaeoplacer ore body to account
  • Options for in-pit waste dumping are being assessed

Plan of the Tarkwa mining area

Tarkwa

 

Damang

The reinvestment project identified that the optimum plan would be to refocus mining on the higher-grade core of the main Damang ore body, where grades of >2g/t have been mined historically.

Asset fundamentals

Asset fundamentals
General location     Damang is located in south-western Ghana, approximately 300km 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 90km to the south-east.
Licence status and holdings     The Damang concession covers a total area of 23,666ha. 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
and processing capacity
    The Damang plant processes mainly fresh ore with approximately 5% oxides, which is sourced from five open pit mining operations and existing surface stockpiles, located on the Damang mine lease.

The plant has been upgraded from 4.0Mtpa to 4.2Mtpa and is a conventional two-stage grinding circuit with a gyratory crusher feeding 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 October 2017 and then until 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 in excess of 2,202mm. 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 2024 (eight years).
Environmental, health and safety     Damang retained its OHSAS 18001 (Safety Management system) certificate following the recertification audit conducted in March 2015. The first surveillance audit after 2015 recertification was conducted in February 2016. The second surveillance audit will be conducted in February 2017 for the two management systems. 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 to 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. Abosso Mine ceased operation in 1956 with recorded production of 2.7Moz at an average grade of 9.8g/t.

Late 20th to 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 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 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 ceased in August 2006 mainly due to the low gold price at that time. 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 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 turnaround 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.

A comprehensive reassessment of the site’s full potential was initiated late in 2015 to identify the best option to take the mine forward to meet the Group’s strategic targets. The review identified that the future of Damang had to return focus on the higher-grade core of the Main Damang ore body, where grades of >2g/t have been mined historically. The transformation away from continuing to try and stay cash positive by mining smaller, shorter life staged pits in the lower grade areas of the Damang ore body became an imperative. The requirement for significant capital reinvestment in Damang to augment a major waste strip programme to open up the main high-grade ore body became the focus for detailed resource modelling, mine planning and optimisation in 2016.

Key developments and material issues

  • The Mineral Reserves at Damang have increased from 1.0Moz to 1.7Moz and are based on the 2017 LoM plan (DRP), which was approved by the Board of Directors in 2016. Infill drilling at Rex and Huni to increase the confidence in the resources, with the likelihood of providing mill gap filler ore in the future, was initiated late in Q4 2016
  • Advance Grade Control (AGC) drilling programmes (typically two benches deep) have continued with the objective of derisking the operational plan
  • Mining is prioritised from the Damang Complex Pits, Amoanda, Lima South, Tomento East and the Lima Kwesie Gap Pits and scheduled to deliver a mining mix and plant feed that maximises cash-flow
  • The Mineral Reserves declared as at 31 December 2016 are constrained by the existing ETSF adjacent to the Damang pit
  • During 2016, Damang reviewed the option of owner vs contractor mining and under the current economic conditions, it proved feasible to return to a contractor mining model for the foreseeable future
  • The DA reached between the Government of Ghana and Abosso GFG supported the DRP
  • Genser, providing independent gas power generation, was commissioned in Q4 2016 and it is expected to reach its full capacity of operation by the close of H1 2017. As a new power generating initiative, Genser will require a period of time to fully bed down and stabilise its operational performance and during this phase there is a risk of incurring periods of downtime which, if extended, would require Damang to revert back to ECG grid power. This could potentially have a material impact on the reliability of the metallurgical plant and impact processing throughput volumes.

Plan of the Damang mining area

Damang