In its second-quarter report released in Johannesburg yesterday, Gold Fields said gold production at Tarkwa increased by 15 per cent from 135,800 ounces in the March quarter to 156,200 ounces in the June quarter mainly due to higher grades mined and processed.
At Damang, gold production increased by 6 per cent from 39,000 ounces in the March quarter to 41,500 ounces in the June quarter mainly due to higher tonnes processed.
Net operating costs, according to the statement, increased by nine per cent from US$125 million in the March quarter to US$136 million in the June quarter.
“This increase in net operating costs was mainly due to an increase in volumes at both mines, as well as a drawdown of inventory of US$6 million compared with a build-up of US$4 million in the March quarter,” it said.
Gold Fields said capital expenditure decreased from US$89 million to US$52 million. At Tarkwa, capital expenditure decreased from US$85 million to US$48 million with expenditure mainly incurred on pre-stripping while capital expenditure at Damang was similar at US$4 million.
All-in sustaining costs (AISC) and total all-in cost (AIC) decreased by 21 per cent from US$1,299 per ounce in the March quarter to US$1,029 per ounce in the June quarter mainly due to higher gold sold and lower capital expenditure, partially offset by higher net operating costs.
Gold Fields said it had started implementing five-year regional energy security plans that had been developed in response to rising energy costs and energy supply concerns in Ghana and South Africa.
The gold miner said notwithstanding production at Damang increasing by six per cent quarter on quarter to 42koz, it continued to focus on improving the long-term profile and longevity of Damang.
“In order to increase mining flexibility and optionality, plans are being formulated to increase capital development to expose higher grade or principally in the Saddle area (part of the greater Damang pit) and to increase exploration activities on numerous targets over a mineralised trend of some 17km,” it said.
Commenting, Nick Holland, Group Chief Executive Officer of Gold Fields said: “Our Ghanaian operations are most exposed to changes in the US$ gold price, however, Tarkwa is a low-cost mine that still makes a margin at the current price and Damang is, in any event, being targeted for reinvestment to unlock value in its resource base.
“Many of the more painful adjustments were already made in 2012 and 2013, at which point we structured the business to deliver a free-cash-flow margin of 15 per cent at a gold price of US$1,300/oz.”
Written by Raymond Marveric
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