South Africa’s second largest gold miner, Gold Fields (GFI), is set to invest $160- million on the expansion of its Tarkwa mine in Ghana, said head of international operations John Munro on Friday.
Gold Fields will spend $75-million on expanding mine output and switching from contract to owner-operated mining, which will commence in late June 2004, and $85-million on building a gold processing plant to be commissioned by December 2004.
“The Tarkwa expansion will secure for Gold Fields a world-class offshore gold asset that has good size, quality of ore body and substantial cash flows,” Munro said at an investor presentation on Friday.
The expansion will lift the Tarkwa mine’s annual gold output from its current level of 550 000 oz/ per year to 700 000 oz.
Outside of the Tarkwa mine, Munro said Gold Fields was set to announce further expansions at its international operations, such as its optimisation plan for its Australian mine St Ives.
“Another possible expansion at our international operations is at St Ives. We are looking at a new approach to mining at St Ives, as it is difficult to operate. A new processing mill is also planned,” Munro said.
Gold Fields is one of the world’s largest gold miners with annual gold output of over 4- million oz.
Tarkwa is 71,1% owned by Gold Fields with two other partners, including the Ghanaian government holding the remaining 28,9%.
Benefits of the expansion
The Tarkwa expansion will see a number of enlargements in the mine’s capacity. The impact for the Gold Fields group will be to increase its offshore gold and US dollar earnings and capitalise on its success in Ghana, Munro said. “Ghana is a stable country, which is mining friendly,” he added.
One of the key benefits of the expansion is to bring the mine’s rising costs under control and stabilise them at about $200/oz. Tarkwa’s total cash cost is currently about $202/oz and without the expansion costs were expected to climb to above $250/oz by 2007.
“If this expansion didn’t take place then we would see continued cost creep at Tarkwa. The expansion will stabilise the mine’s cost position. We expect to claw back at least $20/oz in costs,” Munro said.
The gold processing capacity of the mine will increase by 4,2-million tonnes, once the new mill is up and running, from the existing 15-million tons per annum using the heap leach method.
“Heap leaching is a mild form of gold recovery and the mill will allow for better gold extraction. Milling is more predictable than heap leaching,” Munro said.
Mine throughput will increase from 40-million tons per annum currently to between 60- and 80-million tons per annum while gold recovered will double from 3,6- to 7,2-million tons.
The mining side of the expansion will see the Tarkwa mine switching from contract to owner-operated mining.
“Converting to owner mining will increase our margins at the mine and so enhance profitability,” Munro said.
Currently the mine has a mining contract in Ghana with African Mining Services, which ends in June 2004. As part of the switch to owner-operated mining, the Tarkwa mine will see Gold Fields buy a new set of haul trucks and loaders to improve the mining efficiency.
“We will employ the majority of the existing African Mining Services operators,” Munro concluded. – I-Net Bridge