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Damang Mine Jobs to be Saved After Gold Fields and Government Agreement - News Ghana

Wednesday, 30 March 2016

A recent development agreement reached between Gold Fields and the Government of Ghana could save 2,000 mining jobs at the miner’s Damang Gold Mine.

About 2,000 jobs at Damang would be at risk if the mine is placed under care and maintenance.

The recent deal grants Gold Fields a reduction in the corporate tax rate from 35.0% to 32.5%, effective 17 March 2016 as well as a change in the royalty rate from a flat 5% of revenue to a sliding scale royalty based on the gold price, with effect from 1 January 2017.

Gold Fields said in a statement that the terms of the agreement will be for a period of 11 years for Tarkwa and nine years for Damang, each renewable for an additional five years.

The miner said Ghana continues to be a key region for its operations and has commended the Government of Ghana for “creating a fair and competitive environment in the country”.
However the company said it had not yet decided whether to inject more cash into Damang, one of two mines it operates in the West Africa region, or suspend operations there, company spokesman Sven Lunsche said. “This is obviously a positive input into our decision-making process, though we are considering many other economic, financial and mining variables in the process,” Lunsche added, referring to the agreement with the government, according to Eye Witness News.

Damang Gold Mine

Mineral Resources: 5.3 million ounces

Mineral Reserves: 1.2 million ounces

• 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).


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