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   Arrow Driefontein Gold Mine
   Arrow Kloof Gold Mine
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   Arrow South Deep Project
Arrow West Africa Region
  Arrow Tarkwa Gold Mine
  Arrow Damang Gold Mine
Arrow Australasia Region
  Arrow St Ives Gold Mine
  Arrow Agnew Gold Mine
Arrow South America Region
  Arrow Cerro Corona Gold Mine
Arrow Exploration and Business Development
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REVIEW OF OPERATIONS: WEST AFRICA REGION

Tarkwa Gold Mine

Fatality free year.
CIL plant construction completed and successfully ramped up.
Approaching full production.

OVERVIEW

Location: The Tarkwa gold mine is located in southwestern Ghana, about 300 km by road west of Accra, the capital, at latitude 5°15’N and longitude 2°00’W. It is situated some 4 km west of the town of Tarkwa with good access roads and an established infrastructure, which is served by a main road connecting the port of Takoradi some 60 km to the southeast on the Atlantic coast. Infrastructure: Multiple open pits (currently six), two heap leach facilities and a CIL plant. Geology: The ore body at Tarkwa consists of a series of sedimentary banket quartz reef units (conglomerates) of the Tarkwaian System that are very similar to those mined in the Witwatersrand Basin of South Africa. The operation is currently mining multiple reef horizons from open-pits and there is potential for underground mining in the future. Employees in service: 1,805 permanent employees, 44 temporary employees and 2,846 contractors.

SAFETY AND ENVIRONMENT

The general safety performance of Tarkwa improved year on year with no fatalities, while the lost day injury frequency rate was unchanged at 0.26. The Safe Production Rules programme was formally launched in May 2009 by management, union representatives and safety officials. This event was successful in creating a high degree of awareness.

Tarkwa also retained its ISO14001:2004 (Environmental Management System) certification following an external audit during the year. The mine also retained its full compliance to the ICMI Cyanide Code.

OPERATIONAL REVIEW

Gold produced decreased by five per cent from 646,000 ounces in F2008 to 612,000 ounces in F2009. This was due to teething problems encountered during commissioning of the CIL expansion plant in mid-year and the slightly lower grades mined.

Tons processed decreased from 22.04 million in F2008 to 21.27 million in F2009. This was mainly due to a decrease in tons treated at the South heap as this ore was treated at the new CIL plant to improve its recovery. However, despite an increase in tons milled at the CIL plant, the teething problems and the slightly lower grade did not offset the decrease in production from the heap leach facility.

Tons mined increased from 113.3 million to 132.6 million and ore mined increased from 19.9 million tons to 21.7 million tons.

Revenue increased from US$532 million in F2008 to US$537 million in F2009. Revenue from the higher gold price was partially offset by the lower gold production.

Operating costs, including gold-in-process movements, increased by 15 per cent from US$278 million in F2008 to US$320 million in F2009. This increase was mainly due to increased milling at the expanded CIL plant, which required additional ball mill grinding media, increased power and diesel inputs, together with the increase in tons mined.

Total cash cost increased from US$430 per ounce in F2008 to US$521 per ounce in F2009 as a result of the higher costs and lower production.

Operating profit, before amortisation, decreased from US$253 million in F2008 to US$217 million in F2009. Operating margin decreased from 48 per cent in F2008 to 40 per cent in F2009.

Capital expenditure decreased from US$212 million in F2008 to US$201 million in F2009. The majority of this expenditure was for the completion of the CIL plant expansion, ongoing pre-stripping, increasing the primary mining fleet and relocation of a power substation.

Notional cash expenditure increased from US$766 per ounce in F2008 to US$881 per ounce in F2009.

F2010 Focus Areas

  • The CIL expansion project is expected to increase throughput to one million tons of ore per month on a sustainable basis;
  • The High Pressure Grinding Rolls pilot project to start processing by second quarter F2010; and
  • Overall strip ratio is expected to increase to 5.3.

Lost Day Injury Frequency Rate
per million man hours worked

Lost Day Injury Frequency Rate -  per million man hours worked

 

Tarkwa Gold Mine

          2009   2008   2007  
  Open pit mining                  
  Waste mined   '000t   110,895   93,440   85,508  
  Ore mined   000t   21,689   19,901   22,074  
  Head grade   g/t   1.1   1.2   1.2  
  Strip ratio   W:O   5.1   4.7   4.0  
  Processing                  
  Tons processed Milled '000t   7,733   5,571   5,620  
    Heap leach '000t   13,540   16,464   17,019  
    Total '000t   21,273   22,035   22,639  
  Yield Milled g/t   1.4   1.5   1.5  
    Heap leach g/t   0.7   0.7   0.8  
    Combined g/t   0.9   0.9   1.0  
  Gold produced Milled '000oz   314   267   272  
    Heap leach '000oz   298   379   425  
    Total '000oz   612   646   697  
    Total kg   19,048   20,095   21,684  
  Total cash costs   US$/oz   521   430   333  
  Notional cash expenditure   US$/oz   881   766   512  
  Net attributable earnings   US$m   71.1   105.1   83.1  
  Capital expenditure   US$m   201.1   212.0   107.7