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Damang reinvestment plan
Gold Fields Limited
Reg. No. 1968/004880/06)
Incorporated in the Republic of South Africa)
Share Code: GFI
ISIN Code: ZAE000018123
MEDIA RELEASE
DAMANG REINVESTMENT PLAN
Johannesburg, 24 October 2016: Gold Fields Limited (Gold Fields) (JSE, NYSE: GFI) is pleased to
announce the Reinvestment Plan for the Damang Gold mine in Ghana which will extend the life of
mine (LOM) by eight years from 2017 to 2024. The Reinvestment Plan, entails Gold Fields investing
US$1.4bn (operating and capital expenditure) over the LOM. It will enhance the Group’s presence in
one of its key operating regions and will result in significant social benefits for Ghana, including the
creation and preservation of 1,850 direct jobs.
Over the LOM, a total of 165Mt will be mined, with 32Mt processed at a grade of 1.65g/t, resulting in
total gold production of 1.56Moz. Mining and processing costs are estimated to average US$3.60/t and
US$16.25/t, respectively while all-in costs (AIC) are forecast to average US$950/oz. The benefits of
the Development Agreement (signed between Gold Fields and the Government of Ghana in March
2016), have been key inputs into the Plan and enhances the economics of the project.
The Reinvestment Plan is based on mineral resource models that have been updated in 2016 and
extensively reviewed both internally and by external consultants, namely SRK, Optiro and Rowley
Geological Services (RGS).
Since operations at Damang commenced in 1997, the mine has produced in excess of 4.0Moz,
sourced from multiple open pits. Production from the Damang Pit Cutback (DPCB) came to an end in
2013, and since then mining has focused on the margins of the Damang pit (the Huni, Juno and
Saddle areas) as well as lower grade satellite deposits. The decline in production since 2013 has been
exacerbated by variations in grade in the northern and southern extremities of the DPCB and the
satellite pits where grades have been lower than expected.
Consequently, a strategic review of Damang commenced in 2015 which identified that Gold Fields
should return to mining the higher grade core of the main Damang orebody. Evaluation work in 2015
and 2016 considered a number of options, including:
- Care and maintenance (C&M)
- Closure
- Continuing operations
- Expanding operations
Given the importance of the region to the Group and taking into account the benefits of the
Development Agreement, Gold Fields has taken the decision to continue operations at Damang
through the Reinvestment Plan. The Group will also retain the optionality to expand the operation
should the gold price strengthen sustainably to above US$1,400/oz.
The Reinvestment Plan entails a major cut back to both the eastern and western walls of the DPCB.
The cut back will have a total depth of 341m, comprising of a 265m pre-strip to access the base of the
existing pit. This will be followed by a deepening of the pit by a further 76m which will ultimately provide
access to the full Damang orebody including the high grade Tarkwa Phyllite lithology. To provide short
term ore supply, while the Damang pre-strip is in progress, mining will continue at the Amoanda, and
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paleaoplacer satellite pits (Lima South, Kwesi Gap and Tomento East). In addition, the plant feed will
be supplemented by low grade surface stockpiles.
Inclusion of the Damang cutback will result in a 72% increase in Proven and Probable Reserves to
1.68Moz (31.5Mt @1.65g/t) compared with the December 2015 figure.
Mining will be undertaken by two mining contractors, with negotiations currently at an advanced stage.
At this stage, the contractors are expected to be mobilised early in 2017. A total of 165Mt will be mined
over a 7-year period, with the majority of material coming from the Damang Complex (DCPB/Saddle).
Of this 32Mt will be processed at a grade of 1.65g/t, resulting in 1.56Moz of gold production.
Operational metrics for the project are summarised in the table below:
2017 2018 2019 2020 2021 2022 2023 2024 LOM
Tonnes mined Kt 32 500 36 900 33 200 24 500 15 200 13 300 9 300 0 165 000
Tonnes milled Kt 4 200 3 450 4 200 4 200 4 200 4 200 4 250 3 600 32 300
Head grade g/t 0.90 1.25 1.75 1.80 2.10 2.05 2.05 1.10 1.65
Gold production Koz 110 125 220 225 265 250 260 115 1 565
Mining cost US$/t 3.30 3.10 3.35 3.70 4.25 4.50 5.20 0.00 3.60
Processing cost US$/t 15.95 17.75 15.95 15.95 15.95 15.90 15.65 17.40 16.25
AIC US$/oz 2 265 1 730 1 025 930 660 675 605 800 950
Apart from the waste strip, the only other significant capital required is for the construction of the Far
East Tailings Storage Facility (FETSF) as the existing tailings storage facility (TSF) is approaching full
capacity. An interim 2.5m raise has commenced on the TSF, which will provide for an additional 3.6Mt
tailings capacity and is due for completion by the end of November 2016. Stage 1 of the new FETSF is
planned for completion by end-2017 and will provide 20Mt capacity. Further lifts of the FETSF will cater
for all tailings for the new LOM. Only minor capital work will be required on the Damang Processing
Plant, mostly due to replacement of the SAG Mill shell in 2018.
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In addition to the attractive returns associated with the project, the Reinvestment Plan will result in
significant social and fiscal benefits flowing into Ghana and, more importantly, the communities
surrounding Damang.
Gold Fields estimates direct employment associated with the Reinvestment Plan of 1,850 people. Of
this:
- 368 will be Gold Fields employees, 55% of whom will come from the adjacent communities;
- 90 will be on fixed term contracts, all from the catchment community; and
- Approximately 1,400 will be contractor employees, 60% of whom will come from local
communities.
Assuming a dependency ratio in Ghana around eight dependents per direct mining job, the spin-off
benefits of the new and retained jobs will be significant.
Investment in sustainable development projects is estimated to be US$5.0m over the eight-year period.
This will be split between education (US$1.5m), health (US$0.2m), water and sanitation (US$0.7m),
agriculture (US$1.6m) and infrastructure (US$1.0m).
Gold Fields has also commenced the tarring of the road between Damang and Tarkwa, estimated to
cost US$17m, which is expected to have benefits for the mines as well as local stakeholders.
Enquiries
Investors
Avishkar Nagaser
Tel: +27 11 562-9775
Mobile: +27 82 312 8692
Email : Avishkar.Nagaser@goldfields.com
Thomas Mengel
Tel: +27 11 562 9849
Mobile: +27 82 315 2832
Email: Thomas.Mengel@goldfields.com
Media
Sven Lunsche
Tel: +27 11 562-9763
Mobile: +27 83 260 9279
Email : Sven.Lunsche@goldfields.com
ends
Notes to editors
About Gold Fields
Gold Fields Limited is an unhedged, globally diversified producer of gold with eight operating mines in Australia, Ghana, Peru and South
Africa with attributable annual gold production of approximately 2.0 million ounces. It has attributable Mineral Reserves of around 46 million
ounces and Mineral Resources of around 102 million ounces. Attributable copper Mineral Reserves total 532 million pounds and Mineral
Resources 5,912 million pounds. Gold Fields has a primary listing on the JSE Limited, with secondary listings on the New York Stock
Exchange (NYSE) and the Swiss Exchange (SWX).
Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
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