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| Damang Gold MineTechnical Short Form Report This Technical Short Form Report reflects the latest Life of Mine plan, together with an updated Mineral Resource and Mineral Reserve statement. The declared Mineral Reserve as at 30 June 2009 has increased by 466 koz of gold when reconciled against June 2008, predominantly due to new discoveries, resource modelling and reduction in cut-off grade. Abosso Goldfields Limited (AGL) is a Ghanaian registered company that owns and operates the Damang Gold Mine. Gold Fields Ghana Holdings Limited holds a 71.1% interest in AGL, IAMGold 18.9% and the Ghanaian Government the remaining 10%. Damang manages five Prospecting Licences as well as two Mining Leases, namely the Damang Mining Lease and the Lima South Mining Lease, which equate to 8,111 ha. The mine exploits oxide and fresh hydrothermal mineralisation in addition to Witwatersrand style palaeoplacer mineralisation. The hydrothermal mineralisation is located in Tarkwaian sediments and is the only deposit of its kind, located on the eastern side of the Ashanti Belt in southwest Ghana. Mineral Reserves for Damang are estimated using mine designs generated from standard mine optimisation methods, current cost structures, and technical assumptions derived from actual production history and/or feasibility studies. The Damang Plant processes 5.1 Mt pa from a blend of proximately 37% oxide ore and 63% fresh ore, sourced from the open pit mining operations and existing surface stockpiles. Process feed for the one-year period to 30 June 2009 comprised 5,0 Mt at a yield grade of 1.3 g/t Au for 200 koz. All Mineral Resource and Mineral Reserve figures reported are managed unless otherwise stated and Mineral Resources are inclusive of Mineral Reserves. Salient Features
Key Features
Operating Statistics
Rounding off of figures presented in this report may result in minor computational discrepancies. Where this occurs it is not deemed significant.
Geological Setting and Mineralisation The Damang ore bodies are located within the Tarkwaian Sediments, which form a significant portion of the stratigraphy of the Ashanti Belt in southwest Ghana. The Ashanti Belt is a north-easterly striking, broadly synclinal structure made up of Lower Proterozoic sediments and volcanics underlain by the metavolcanics and metasediments of the Birimian System. The Tarkwaian unconformably overlies the Birimian, and is characterised by lower intensity metamorphism and the predominance of coarse grained, immature sedimentary units.
Local geology The stratigraphy at Damang is primarily through the Tarkwaian Group and comprises a large-scale fining upwards sequence of clastic sediments interrupted by up to four major goldbearing quartz pebble conglomerate horizons. This sequence unconformably overlies a mixed Birimian Supergroup basement comprising volcaniclastic deposits and minor fine-grained clastic sediments and black shales. The entire region is intruded by a number of igneous intrusions, the most common being dolerites that occur as narrow dykes and sill-like bodies along contacts on either side of the Tarkwa Phyllite, a particularly fine-grained pelitic unit in the upper Tarkwaian. A second intrusive body, the so-called `Diorite Porphyry’ occurs sporadically along the boundary between the Birimian and the Tarkwaian. Palaeoplacer mineralisation There are three gold-bearing conglomerate horizons recognised on the western limb of the Damang Anticline. From footwall to hangingwall, these are known as, the Star/Composite, Malta/Breccia, and Gulder Reefs. There are also three gold-bearing conglomerate horizons recognised on the eastern limb, namely the Lima, Kwesie-K1, and Kwesie-K2 Reefs. These conglomerate horizons are separated by poorly mineralised sandstone units.
The reefs are usually characterised by a fining upwards sequence of poorly to moderately sorted, clast supported polymictic conglomerates. However, local variations are observed where the conglomerate domain is interbedded with fine to coarse grained, poorly sorted sandstones. The Star/Composite, Malta/Breccia, and Gulder Reefs on the west limb and the Lima, Kwesie-K1 and Kwesie-K2 Reefs on the east limb of the Damang Anticline, feature significantly higher gold grades than the poorly mineralised sandstone units, which separate the reefs. The conglomerate reefs may contain between 1.3 to 1.5 g/t Au, and the poorly mineralised sandstone units usually contain between 0.2 to 0.1 g/t Au. Hydrothermal mineralisation Hydrothermal gold mineralisation at Damang occurs in pyrite and pyrrhotite alteration selvages, which are usually less than 1 m wide and located immediately adjacent to en-echelon quartz veins. Gold is also associated with accessory vein minerals such as carbonate, muscovite, tourmaline, ilmenite, and apatite. These alteration zones are often linked, and may result in significant volumes, characterised by intense veining and gold mineralisation. Damang is unique in Ghana by virtue of having hydrothermal mineralisation hosted in the quartzites of the Tarkwaian Banket Footwall as opposed to the Metavolcanics and Metasediments of the Birimian Basement as seen at Prestea, Bogoso, and Obuasi.
Exploration and drilling The Exploration Strategy constitutes the following:
Exploration drill programmes are designed to assess the magnitude and style of mineralisation. Reverse circulation (RC) drilling is usually employed for initial exploration drill testing of both palaeoplacer and hydrothermal styles of mineralisation. Diamond drilling is usually minimised in the initial exploration stages due to the higher cost, however, it is common for a small component of core drilling to be performed, to establish stratigraphic and structural relationships and to enable samples to be collected for metallurgical test work. In general terms, it is aimed to achieve a RC drill spacing of 100 m along strike by 100 m down dip, with confirmation core drilling undertaken to resolve local complexities, in both hydrothermal and palaeoplacer mineralisation. Initial, and follow-up exploration drilling, is undertaken outside optimised pit shells and is done to assess the magnitude, grade distribution and continuity, engineering and metallurgical character of the mineralisation. Exploration objectives are specified in the operation’s business plan and Mineral Reserve Replacement Strategy. Infill and Mineral Resource conversion drilling is required to increase the level of confidence in a resource estimate by more accurately resolving mineralisation boundaries, grade continuity and distribution and internal waste boundaries. Resource models, which will be generated following the completion of this drilling, will be used to establish more robust production schedules and will enable more accurate and confident grade and tonnage reconciliation to be undertaken. Damang needs to accelerate its recent rate of discovery to maintain a pipeline of quality projects and to provide additional Mineral Reserves to drive the LoM extension initiative to F2025. On-Mine lease exploration activities in F2010 will be assisted by the near mine exploration initiative to ensure that the highest potential targets are investigated as a priority. Prime targets include Amoanda North, Damang North (Huni) and Nohokoa.
Mining Mining at Damang is carried out by conventional open pit methods using a contractor-fleet operated by African Mining Services (AMS). AMS has held the earth-moving contract since the commencement of operations in August 1997. Load and haul is undertaken using a standard truck-shovel operation, with excavators in backhoe configuration (two Liebherr 994 and five Liebherr 984s). The haulage fleet consists of thirty-five (35) Caterpillar 777F dump trucks, with an average payload capacity of 100 t.
Off-highway trucks haul ore to interim stockpiles near to the mining area. A fleet of tipper trucks operated by Engineers and Planners Ltd then reclaims the ore and transports it to the treatment plant. Mining methods Consistent with the current production schedule, mining is carried out seven days per week, two shifts per day. Dayshift is 11 hours duration and night shift is 10 hours duration. Ancillary equipment includes bulldozers, graders, water trucks, and service truck vehicles, supporting the drill-and-blast and haulage operations through vehicle, road, and bench maintenance, dust and erosion control. Fresh rock and transitional zones are drilled and blasted in 6 m lifts, with excavation in 3 m flitches. To optimise ore fragmentation and blast control, blasting in fresh rock utilises both conventional (Nonel) and electronic detonators. Oxide material, which cannot be ‘free-dug’, is blasted using lower powder factors. Waste material is hauled to planned dumps located close to the pit exit. AGL has a progressive reclamation plan, whereby, as areas become inactive, they are immediately rehabilitated through contouring, and replacement of topsoil, seeding, planting, and fertilisation. Oxide ore is selectively mined to provide incremental feed to the mill with Tomento North and East pits, located at 5.3 km and 6.3 km respectively from the treatment plant, currently serving as the main oxide sources. During 2008 the Rex pit, located 15 km to the south of the treatment plant was developed to replace the nearly depleted Tomento North. The haul roads are designed for CAT 777F trucks. For double lane traffic, the minimum width is 23 m, and includes a drainage ditch and safety berm. For single lane traffic, a minimum width of 15 m is used.
Mine planning and scheduling The Mineral Resource forms the basis for subsequent design, planning, and extraction scheduling, incorporated into the LoM plan. In the majority of instances, this is completed using a combination of commercial software packages. For all operational plans, a detailed (one-year) operating and capital cost budget is produced and where appropriate extended for the LoM production schedule. The operational plan is prepared on a monthly basis. Zero-based costing is used to formulate the plan. Of critical importance is the utilisation of historically achieved data for productivity and operating costs. All capital projects are ranked and prioritised to maximise capital efficiency and return on investment. Open pit planning involves the input of economic parameters and physical constraints into optimisation software to generate a series of nested pits from which an optimal shell is selected. Detailed design is then undertaken to confirm the mineability of the optimised shell. The process is iterated until an acceptable level of correlation is achieved between the optimised shell and detailed design. The relatively small dimension of the pits and the characteristics of the ore bodies (i.e. narrow and steeply dipping palaeoplacer reefs), combined with the equipment size, make the pit design exercise critical when it comes to keeping strip ratios in line with optimisation results. Standard mine design software is used; Whittle 4X to derive the optimal pit shell and Datamine or MineSight for the detailed engineering and design work on the optimised pit shells. Mine planning is based on three-dimensional block models of in situ mineralisation, with allowances made for minimum mining widths, dilution and ore loss appropriate to the mining method being considered. Historical performance measures are considered in determination of these modifying factors. Infrastructure, waste disposal and ore stockpile management requirements are incorporated into the planning process. Projects Initial drilling projects for F2010 are as follows: The Bonsa Hydrothermal project lies on the Eastern Limb of the Damang anticline within the north-south striking Banket Formation. Birimian basement occurs to the west and Tarkwaian Phyllite to the east. A number of the important east-northeast trending faults traverse the project area. The Tomento Gap project just south of the Tomento pits was identified as a possible source of hydrothermal mineralisation and needs to be explored. This is in line with the view that Palaeoplacer orebodies should also be tested for hydrothermal mineralisation. The geological setting of the Chida East project, just north of Rex, is very similar to the Rex orebody and needs to be tested for hydrothermal mineralisation. The Rex South project borders the Rex orebody and features an east-northeast structure with north east striking magnetic lineaments across the Banket, Kawere and Birimian contacts. Soil sampling, trenching and pitting at Rex South have identified hydrothermal mineralisation along the Birimian – Tarkwaian contact. A previous diamond drilling program, designed to explore Rex South, was prematurely stopped due to bad weather conditions and the undulated terrain but work will continue during the new financial year. Nohokoa extends for over 3 km between Amoanda in the north and Rex North in the south. The area is located on the contact between the Tarkwaian and Birimian Basement, and has potential for Rex/ Amoanda – style hydrothermal mineralisation. Previous exploration work was followed-up by a diamond drilling program during F2009 and in view of the unexpected geology and mineralized formations, a follow-up phase may well be drilled in F2010 pending final assay results.
The Damang North and Koduakrom projects lie to the north of the Damang (Huni) orebody and on strike of the Damang Fault and have potential hydrothermal mineralisation. These areas received little attention in the past and will be explored during the next financial year. In order to locate concealed/sub-surface ore bodies, geophysical exploration techniques (Induced Polarization and Gravity surveys) were employed during the fourth quarter of F2009 and this work will be continued during F2010. The target area extends from the Damang pit in the north to Rex in the south with the Tarkwaian and Birimian as target Formations. A secondary crusher is to be installed to reduce the current dependency on oxide ore.
Mineral Processing The Damang milling circuit was commissioned in November 1997 at the design throughput of 3 Mtpa. A number of modifications and optimisations allowed an increase in the annual throughput to about 5.2 Mtpa. The Plant is a conventional two-stage grinding circuit using SAG and Ball mill combination, with pebble crusher and gravity concentration, followed by a carbon-in-leach recovery process. The average throughput of the Plant is currently 14,200 tpd, with an average availability of 94.9%. The ore being treated at Damang consists of fresh rocks (siltstone, sandstone, phyllites and dolerite) and weathered material (laterite, saprolite). The blend requirement of the feed to the plant is currently budgeted at 65% fresh and 35% oxide. A high fresh rock proportion up to about 65% is treated when new shell liners are installed in the sag mill. However, in order to sustain the mill throughput getting to the end of the life of the liners, the blend is made a little softer, with up to 55% fresh rocks. The optimisations and modifications work carried out on the Plant, has seen the Plant throughput increasing from 450 tph to a current 630 tph. This has reduced the total residence time at the CIL circuit from 30 hours to 17.8 hours. The reduction in the residence time has affected the overall gold recovery on the CIL Plant, with a reduction from an average of 93.6% (from 1998 to 2000) to 90.5% (from 2001 to 2006). However, since the successful installation and commissioning of the seventh tank in October 2008 and a second Knelson concentrator, the recovery has increased by 1.6% to 93.8%. The plant will therefore be in a better position to receive the high grade material from the Damang cut back at the current throughput.
Damang LoM Tailings Storage Facility Assessments
Sustainable Development Damang aims to comply with established Gold Fields Group Health and Safety Policy, which subscribes to international best practices, specifically in the context of World Bank Policies and Guidelines, International Finance Corporation Operational Policies, International Labour Organisation Conventions and OHSAS18001. Damang has achieved an outstanding health and safety performance through the participation of all employees and the application of safe, innovative processes and technologies, within a framework of full compliance. The Mine has set itself a target of zero lost day injuries for the next financial year. The Mine’s progressive fatality free shifts is currently in excess of 4 million. There have been 29 injuries recorded during F2009, comprising 2 lost day injuries, 5 medically treated injuries and 22 minor injuries. Analysis of incidents indicates that hand injuries due to material handling and/or use of equipment, are the major factors to be addressed. Seventy percent of near miss and dangerous occurrences were related to the use of mobile equipment, particularly light vehicles, and haul trucks. Environmental management at Damang is conducted within the framework of an ISO14001 certified Environmental Management System (EMS). Certification of the system occurred first in July 2003 for a three-year period and has since then been the subject of annual third-party audits. Re-certification of the EMS under the revised ISO14001:2004 standard was achieved in July 2006 for another three-year period. The foundation of the EMS is the Abosso Goldfields Limited Environmental Policy, which is aligned with the Gold Fields Limited Environmental Policy.
Mineral Resources and Mineral Reserves The Damang Mineral Resource and Mineral Reserve declarations are based on systematic and sustainable mineral reporting practices. Systematic RC and DD drilling and subsequent core-logging, consistently updates the geological structure and reef-pod models used as the basis of each declaration. On-going sampling of RC, DD and grade control core is carried out to provide additional grade data that is incorporated into a detailed evaluation model. Updated pit designs and schedules are then compiled and evaluated based on the most recent technical and economic parameters to compile a LoM plan. Cognizance is taken of pit limitations, haul road distance and plant capacity. Detailed economic and scenario models are subsequently compiled to ensure validity of positive cash flow for Mineral Reserve declaration purposes. Internal and external audits as well as peer reviews are conducted to ensure consistency and compliance to regulatory practices. Mineral Resources Mineral Resources are quoted at an appropriate in-situ economic cut-off grade with tonnages and grades based on the resource block model. They also include estimates of any material below the cut-off grade required to be mined to extract the complete pay portion of the Mineral Resource;
Modifying factors
Grade tonnage curves Open pits
Underground
Mineral Reserves The Mineral Reserves are derived following the production of a LoM plan, by incorporating modifying factors into the Mineral Resource model. Optimal pit shells are used as a basis for pit design. Bench Mineral Reserves are generated from the pit designs for scheduling and comprise four scheduling categories, oxide and fresh ore plus oxide and fresh waste. The oxide and fresh ore categories are based on confidence intervals, weathering codes and cut-offs, whilst the oxide and fresh waste categories include all materials that are not considered as ore. In general, Proved Mineral Reserves are derived from Measured Mineral Resources, and the Probable Mineral Reserves are derived from Indicated Mineral Resources, except where confidence levels of modifying factors leads to Measured Mineral Resources converting to lower confidence Probable Mineral Reserves. The stockpiles included in the Mineral Reserve comprise mostly lower grade mineralisation that has been accumulated since the start of mining of the Damang Pit. The stockpile material comprises about 10% of the Mineral Reserve ounces and 14% of the Mineral Reserve tons.
Mineral Reserve by deposit
Mineral Resources and Mineral Reserve Reconciliation year-on-year Mineral Resource Factors that affected Mineral Resource reconciliation:
Change in Mineral Resource F2009 to F2010
Mineral Reserve Factors that affected Mineral Reserve reconciliation:
Change in Mineral Reserve F2009 to F2010
Mineral Reserve sensitivity The Mineral Reserve sensitivity has been derived from the application of the relevant cut-off grades to individual gradetonnage curves of the optimised pit shells for the open-pits. The Mineral Reserve sensitivities are not based on detailed depletion schedules and should be considered on a relative and indicative basis only. The following graph indicates the Managed Reserve sensitivity at –10%, -5%, base, +5%, +10% and +25% to the gold price. Managed Mineral Reserve Sensitivity
Regulatory Codes SAMREC JSE Sarbanes-Oxley Act Environmental Competent Persons Arnand van Heerden: Mineral Resources Manager Chris Murray: Chief Mine Geologist Sean Kelly: Geostatistics and Evaluation Manager Deon Steenkamp: Chief Exploration Geologist David Lee: Consulting Mining Engineer Key Technical Staff
Damang History at a Glance
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