West Africa region

Ghana

Tarkwa

        June
2011
  March
2011
 
  Gold produced - 000’oz   180.8   186.1  
  Yield  - heap leach - g/t   0.5   0.5  
            - CIL plant - g/t   1.4   1.5  
            - combined - g/t   1.0   1.0  
  Total cash cost - US$/oz   534   464  
  Notional cash expenditure - US$/oz   889   871  
  NCE margin - %   41   37  

Gold production decreased from 186,100 ounces in the March quarter to 180,800 ounces in the June quarter. The lower production was as a result of decreased CIL throughput at a lower head grade.

Total tonnes mined, including capital stripping, decreased from 29.3 million tonnes in the March quarter to 28.9 million tonnes in the June quarter. Production was affected by excessive rainfall during the quarter. Ore mined at 5.4 million tonnes was similar to the previous quarter. Mined grade at 1.23 grams per tonne was marginally lower than the 1.24 grams per tonne reported for the March quarter. The strip ratio reduced from 4.36 in the March quarter to 4.33 in the June quarter.

The total feed to the CIL plant decreased from 2.94 million tonnes in the March quarter to 2.92 million tonnes in the June quarter. Yield decreased from 1.5 grams per tonne to 1.4 grams per tonne. The CIL plant produced 129,400 ounces for the June quarter compared with the record 138,500 ounces in the March quarter.

Total feed to the North and South heap leach increased from 2.86 million tonnes to 2.97 million tonnes and the yield increased from 0.52 grams per tonne to 0.54 grams per tonne. The High Pressure Grinding Roller (HPGR) at the South heap leach processed 0.82 million tonnes, compared with 0.87 million tonnes in the March quarter. The heap leach process produced 51,400 ounces, compared with 47,600 ounces in the March quarter. The increase was attributable to an increase in gold placed on the heaps and improved dissolutions.

Net operating costs increased from US$83 million (R576 million) in the March quarter to US$88 million (R596 million) in the June quarter. This was mainly due to a lower gold-in-process credit in the June quarter and higher fuel prices. Total cash cost increased from US$464 per ounce in the March quarter to US$534 per ounce in the June quarter, mainly as a result of the decrease in production and the increase in the royalty from 3 per cent to 5 per cent, with effect from 1 April 2011.

Operating profit increased from US$175 million (R1,219 million) to US$185 million (R1,257 million).

Capital expenditure decreased from US$57 million (R396 million) in the March quarter to US$52 million (R354 million) in the June quarter, with new mining equipment, the tailings dam expansion and pre-stripping being the major items.

Notional cash expenditure increased from US$871 per ounce to US$889 per ounce due to decreased production and increased costs. The NCE margin increased from 37 per cent to 41 per cent.

Damang

        June
2011
  March
2011
 
  Gold produced - 000’oz   56.3   57.5  
  Yield - g/t   1.4   1.4  
  Total cash cost - US$/oz   660   703  
  Notional cash expenditure - US$/oz   876   1,154  
  NCE margin - %   42   17  

Gold production decreased from 57,500 ounces in the March quarter to 56,300 ounces in the June quarter as a result of lower mining volumes from the high grade Damang pit cutback (DPCB). This was due to partial sterilisation of the pit floor for safety reasons whilst mining the East Ramp, which will allow access to additional ore supply by increasing the mining width from the end of the year.

Total tonnes mined, including capital stripping, increased from 5.1 million tonnes in the March quarter to 5.7 million tonnes in the June quarter. The increase in tonnes mined is a requirement for exposing long term ore reserves and delivery of fresh ore to the mill. Ore mined decreased from 1.3 million tonnes to 1.2 million tonnes. Capital stripping for the quarter increased from 1.2 million tonnes to 2.3 million tonnes. The total strip ratio, including capital strip, was 3.8 compared with the previous quarter’s 3.1.

Tonnes processed at 1.27 million tonnes were similar to the March quarter.

Net operating costs decreased from US$39 million (R274 million) in the March quarter to US$34 million (R229 million) in the June quarter due to a US$7 million saving, mainly realised from a full quarter of owner mining, partially offset by a gold-in-process charge of US$2 million. Total cash cost decreased from US$703 per ounce to US$660 per ounce mainly due to the decrease in operating cost.

Operating profit increased from US$40 million (R280 million) in the March quarter to US$51 million (R348 million) in the June quarter.

Capital expenditure decreased from US$27 million (R187 million) to US$17 million (R113 million) as a result of the owner mining project reaching completion.

Notional cash expenditure decreased from US$1,154 per ounce in the March quarter to US$876 per ounce in the June quarter. The NCE margin increased from 17 per cent to 42 per cent as a result of lower operating costs and capital expenditure.