Introduction West Africa A premier mining destination Gold Fields - - PDF document

DAMANG GOLD MINE – OVERVIEW REALISING THE DREAM OF 2025 AND BEYOND Introduction

West Africa

• A premier mining destination

Gold Fields

• A 15 year history in Ghana

Tarkwa

• A world class, well capitalised

mine

Damang

• A new lease on life

A strong near mine and greenfields growth pipeline

GOLD FIELDS WELL ESTABLISHED

Tarkwa Damang Yanfolila

West Africa is host to world class gold deposits and a premier mining destination with a long history of mining in Ghana and Mali. Damang, in particular, will leverage off these deposits and provide a new lease on life.

Regional Strategy

• “If we cannot mine safely, we will not mine”
• Stakeholder relationships
• Maintain stable power supply

Secure The Future

• Tarkwa CIL Build-up, HPGR Project
• Tarkwa South Heap Leach Reprocessing Opportunity
• Damang Secondary Crusher Installation
• Business Process Re-Engineering

Sweat the Assets

• Regional exploration focus
• Damang: Near Mine Exploration
• Mali: Komana-Sankarani Project
• Growing towards 1 Moz attributable in 5 years

Grow Gold Fields

FOCUSED ON GHANA AND MALI

HISTORICAL OVERVIEW - DAMANG

• 1990 to 95 – Discovery and exploration of the Damang ore body;
• 1996 to 97 – Construction of Damang mine and mill;
• Aug to Nov 97 – Commenced mining in August with first gold pour in November;
• January 2002 – Change of ownership to Gold Fields Ltd (71.1%) and IAMGOLD

(18.9); Government of Ghana owns 10%;

• 2004 to 2006 - US$55M paid in dividend

The Damang Ore body was first discovered between 1990 and 1995 when Ranger Gold entered the area to mine the tailings of the Abosso Gold Mine. In 1997 the construction of the Damang mine and mill was completed and mining commenced in August with the first gold pour in November. In January 2002, Gold Fields acquired a stake in the Damang gold mine. Gold Fields owns 71.1% of this asset while IAMGOLD and the Ghanaian government each own 18.9% and 10%, respectively.

OUR VISION

Damang A leading Ghanaian gold mine delivering ongoing optimized returns to its stakeholders whilst excelling in sustainable development 1.

• 1. Rated as the safest operating mine in

Ghana in 2004 (Ghana Chamber of Mines);

• 2. GF Chairman’s Safety Shield for 2008;
• 3. Best Mine in Ghana in 2009 based on Occupational

Injury Statistics (Minerals Commission)

• 4. Environmentally Most Committed Company

in the Mining Sector in 2004&5 (EPA award).

GLOBAL LEADER IN SUSTAINABLE GOLD MINING

Damang’s vision is strongly aligned with the Group vision of being the global leader in sustainable gold

• mining. To this end, Damang has upheld Gold Fields’ number one value of safe production and was

recognized as the safest operating mine in Ghana in 2004. It was also awarded the Chairman’s safety shield in 2008 as well as the award for Best Mine in Ghana in 2009 based on Occupational Injury Statistics as defined by the Minerals Commission. Damang has also upheld the environmental management standard and was awarded the EPA award for the most environmentally committed company in the mining sector in 2004 & 2005.

SENIOR MANAGEMENT

F&A Manager Gabriele Decina MR Manager Marcus Brewster HR Manager Charles Kwasi Klutse Environmental Manager Francis Nyame Mining Manager Gareth Phillips Metallurgical Manager Charles Amoah General Manager Alfred Baku Engineering Manager Christo Vilj oen Group Security Manager Dries Hugo Safety Manager Andre von S

• lms

Group IT Manager S teve Larbi Local Affairs Manager R

• bert S

iaw

30 30 30 30 30 30 30 26 26 28 26 24 21 18 16 19 21 25 8 9 13 20 21 24 25 28 5 10 15 20 25 30 35 2002 2003 2004 2005 2006 2007 2008 2009 2010

Expatriates & Senior Officials

Expat Quota Expats Senior Officials

Damang has a strong management structure. More importantly, concerted efforts to improve the mix

• f expatriates and local management has been extremely successful resulting in local senior official

appointments increasing from zero to 28 in the last 8 years, an achievement we’re very proud of. ENVIRONMENTAL EXCELLENCE ENVIRONMENTALLY MOST COMMITTED MINE IN GHANA

In line with the vision of sustainability, Damang is committed to maintaining the environment through responsible mining as well as various outreach programmes that enhance the environment as well as uplift local communities. KEY PERFORMANCE INDICATORS

Description Unit F2007 F2008 F2009 F2010 Plan F2010 Outlook Ore Mined Mt 3.1 4.1 4.4 3.9 3.8 Tons Milled Mt 5.3 4.5 5.0 5.2 5.0 Head Grade g/t 1.20 1.43 1.34 1.42 1.39 Capex US$M 32 28 17 25 30 Operating Margin % 26 26 25 31 44

Damang has had a commendable history of solid operating performance in terms of key performance

• indicators. Worth noting is that it has managed to increase operating margin by almost 70% in the last 3

years.

DAMANG PROFILE

50 100 150 200 250 300 F2007 F2008 F2009 F2010 Plan F2010 Outlook Steady State

Production (koz)

Steady State: Production - 240 koz per annum. Cash cost - US$590/oz NCE - US$690/oz Crushing facilities upgrade for higher grade hard ore.

• Significant potential for margin improvement.

Optimization of mining and processing costs. Strong near mine exploration focus to extend LOM from 2018 to 2025 and beyond. “Super” pit opportunities.

• Mine Huni and Juno pits concurrently with DPCB.
• Ensure consistent supply of high grade fresh ore.

Resources 74.9Mt @ 1.8g/t = 4.3 Moz Reserves 36.1Mt @ 1.6g/t = 1.8 Moz LOM Strip Ratio 3.3

TARGETING A 15 YEAR LIFE OF MINE The secondary crusher was commissioned at the end of April which strategically alters the future of this

• peration. The secondary crusher will enable the mining and processing of fresh, higher grade ore. This

has prompted a second strategic imperative i.e. in the area of exploration for fresh ore. The focus will be on core exploration across the lease area, targeting fresh, high grade sources of Damang style hydrothermal mineralization along the entire 18km strike length of the Damang ore body. The initial focus is on opportunities more proximal to the plant, starting in the vicinity of the existing Greater Damang Pit, where there’s an opportunity to create a super pit, and in the Amonada‐Tomento corridor. More detail is provided in the Damang exploration presentation. Damang currently has 4.3 million ounces of resource and 1.8 million ounces of reserves and strip ratio of 3.3.

MINING OPERATIONS

• Mining via contractor (AMS) under AGL supervision,
• Daily production 50kt; Yearly Production 18.0Mt,
• Currently mining in three pits: DPCB, Tomento East and Rex
• Current mining fleet: 4 x 984 Liebherr Excavators, and 17 x CAT777 100t Dump trucks,
• Grade Control ‐ 12m benches (hydrothermal pits only),
• Drill & Blast – 6m benches and Mining – 3m flitches,
• Ore haulage from Satellite pits ~25km from ROM undertaken by Ghanaian contractor

(Engineers & Planners),

• Mining operation: 2 shifts (day & night) with 3 crews,
• AMS workforce is 343 (7 Expatriates and 336 Nationals), and
• E&P workforce is 153 (1 Expatriate and 152 Nationals).

In terms of mining operations, Damang is currently contractor mined by Australian mining contractors AMS under AGL supervision. Daily production is at 50,000 tons and yearly production is at 18 million

• tons. We are currently mining in three pits, namely the Damang Pit Cut Back, Tomento East and Rex.

The fleet is comprised of 4 Liebherr Excavators and 17 777 CAT Dump trucks. Grade control is conducted by means of 12m benches while drill and blasting is by means of 6m benches and mining through 3m flitches. Hauling is conducted by a Ghanaian contractor and distances are approximately 25km.

DAMANG – OPERATIONS PLAN

DPCB LIMA SOUTH BONSA NORTH ABOSSO UNDERGROUND TOMENTO NORTH TOMENTO EAST AMOANDA REX HUNI JUNO

12KM

T CONTRACTORS & FUEL STORAGE

AMS Office & Workshop Shell Fuel Storage E&P AEL Magazine

PROCESSING FACILITY PROCESS FLOW

• /f

ROM & COS CRUSHING

• Primary Crusher
• Krupp 54” x 74” Gyratory Crusher
• 600kW Hyundai 12pole 3300V, 492rpm motor
• Capacity of 2000tph
• Feed F80 = 600mm, Product P80 = 140mm
• Krupp variable speed apron feeder
• AF18 x 6.361/D4 model, 6.361m x1.8m wide,D4

bulldozer tracks & rollers. 2500tph capacity & speed variance from 0-.29m/sec.

• Conveyor belt
• Discharge conveyor (CV01) – 1600mm x 236m with

speed of 1.5m/s & capacity up to 2400tph

• Reclaim conveyor (CV02) – 1600mm x 261m
• mill feed conveyer (CV03) – 1000mm x 600m with

speed of 1.02 m/s

MILLING

SAG mill – 5,8 MW currently run at 6,2 MW, Ball mill – 5,8MW (slipper pad mills/Combi flex Flender gearbox)

GENERATING PLANT

• 24 Diesel Driven Generators – 17.5MW. Additional generators will ordered to cater for

the Secondary crusher.

• LPG Storage facility

SECONDARY CRUSHING PLANT

• Capex

US$ 11.7M

• Incremental NPV (5.0%)

US$ 91M

• IRR

81%

• Total revenue

US$ 187M

• Net Cash flow

US$ 127M

• Payback period

8 months

• Increase Production

240kozpa

As mentioned before, Damang has been given a new lease on life with a switch to mining and processing fresh hard rock instead of relying heavily on soft oxidised material. The switch entailed the installation of the $12m crushing plant. The plant, with its bank of three crushers, will raise the percentage of higher- grade fresh-rock material fed into the mills to 95% from 63%, bringing an extra 40,000 ounces a year. Damang will be a 240,000 oz/year mine. Improved production is expected over the next few quarters. The increase in gold output comes from the grade rising to 1.6 grams/tonne (g/t) from 1.3 g/t as the proportion of higher-grade fresh rock is increased. The volumes through the mills will remain flat.

FINANCIALS

200 400 600 800 1000 1200 2003 2004 2005 2006 2007 2008 2009 2010F 242 222 282 341 472 551 661 645 243 228 441 439 637 753 743 749 334 390 421 431 636 826 877 1,082

CASH COST NCE GOLD PRICE

The increased cost profile at Damang can be attributed to higher fuel prices and lower production. Looking ahead, the price of electricity could rise by 50% or even double from $0.10 per kilowatt hour.

However, the chances of electricity tariffs increasing in the near term are slim. Electricity constitutes about 14% of total costs at Damang.

OUNCE PROFILE

50000 100000 150000 200000 250000 300000 F2011 F2012 F2013 F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 Ounces Mined (koz) Period

Damang Cutback Juno3 Cutback Huni 3&4 Cutback Tomento East Lima South Tomento North Lima Gap Rex Abosso tails AMOANDA DAMANG SUPER PIT AMOANDA – TOMENTO CORRIDOR DAMANG DEEPS

LOM – 2025 and BEYOND Growing Damang Beyond 2025

As can be seen from the above slide the life of mine at Damang was expected to wind down around

• 2018. The secondary crusher has provided a new lease on what was a very short remaining life and will

result in a life of mine running to 2025 and beyond. There is potential for a mini “super pit”, which will link a string of pits into a three kilometre long mine, folding in intervening blocks of ground and extending

• ther pits that were mined out as drilling programmes and the renewed focus on fresh rock changed the

way the ore body is viewed.

TOWN SITE Damang provides a comfortable living environment for its employees and even sports an 18 hole golf

• course. We are excited about the prospects at Damang and look forward to its contribution to

increasing attributable production from the West Africa Region to at least one million ounces a year

• ver the next five years.

END