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Ghanas prominent role in Gold Fields

Monday, 18 February 2013

Accra, 18 February 2012: Gold Fields' Ghanaian operations are now the largest contributors to the company's production profile, Gold Fields Executive Vice-President and Managing Director of the Ghana operations, Peet van Schalkwyk, said today.

Presenting the company's fourth quarter and full-year 2012 financial results, Mr Van Schalkwyk said that the two Ghanaian mines, Tarkwa and Damang, showed a solid performance. While gold production for the year was slightly lower at 885,000 ounces for the fourth quarter, it increased by 11% to 208,600 ounces. This was largely due to the resumption of full operations at the heap leach operations at Tarkwa and an improved operational performance at Damang.

From this year the Ghanaian operations will be the largest contributor to production and earnings after Gold Fields spun off two of its older South African mines, KDC and Beatrix, into a separately managed and listed company, Sibanye Gold. Without these South African mines, the two Ghanaian mines in the portfolio would have accounted for 43% of Gold Fields' production in 2012. Gold Fields' Australian production would have accounted for 29%, Peru 15% and it's only remaining South African asset - the developing South Deep project -13%.

Even when South Deep comes into full production in 2016, the Ghanaian mines are still expected to be the largest contributor with an estimated 35%. "Ghana has always played a significant part in Gold Fields' overall portfolio. Now that they are the largest contributor to the company, they will receive even more dedicated focus," Mr Van Schalkwyk said.

The Ghanaian operations also account for the second largest Mineral Reserve base for Gold Fields with 14 million ounces of gold of a total of 64 million ounces. The company is focussing its efforts on bringing these Reserves into account at both mines, said Gold Fields Country Manager for Ghana, Pierre Coussey.

Tarkwa mine is considering its 6th expansion phase, which will entail the suspension of all remaining heap leach operations and the processing of ore through a Carbon-in-Leach (CIL) plant to improve recoveries. Various options for the expansion of the existing CIL capacity at Tarkwa are under consideration, said Mr Coussey.

Damang is a mine in transition. Gold Fields has discovered significant new Mineral Resources and Reserves and unlocking these reserves would require a significant recapitalisation of the mine during 2013 and 2014. Various options are being explored on how best to economically unlock these reserves and resources.

Mr Coussey said that the extent to which Gold Fields could invest in its Ghanaian operation would depend on the country's fiscal regime and a successful outcome of its negotiations with the government to reach a favourable tax stability agreement. "I am hopeful that we're going to arrive at a win-win deal for everyone. More tax into the coffers for the government, potentially more jobs at our mines and a healthy financial return for our investors," he said.

Mr Coussey said that in its efforts to provide benefits for all stakeholders, Gold Fields has made significant investments in the communities adjacent to Tarkwa and Damang. Last year, more than US$4.5-million was spent on community projects, bringing the total socio-economic development spend to US$34 million since 2005.

"While the company's new global strategy is to focus on cash generation, a key focus area is sustainable development - and that means taking care of our employees by way of training and communities in which we operate, so we can leave a legacy of economically-viable and sustainable projects that contribute to the overall GDP of Ghana."

The company was also Ghana's largest corporate taxpayer in 2012, paying just over US$250million in direct taxes, royalties and dividends to the government (excluding deferred tax of US$120.3 million).


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