The highlights of the agreement include:
• A reduction in the corporate tax rate from 35.0% to 32.5%, effective 17 March 2016.
• A change in the royalty rate from a flat 5% of revenue to a sliding scale royalty based on the gold price (as per table below), with effect from 1 January 2017.
Gold Fields said the terms of the agreement will be for a period of 11 years for Tarkwa and nine years for Damang, each renewable for an additional five years.
The miner said Ghana continues to be a key region for its operations and has commended the Government of Ghana for “creating a fair and competitive environment in the country”.
The agreed royalty rates and corresponding prices are as follows:
Royalty rate Gold price
3.0% US$0 – 1,300/oz
3.5% US$1,300 – 1,449.99/oz
4.0% US$1,450 – 2,299.99/oz
5.0% US$2,300/oz – unlimited
Damang Gold Mine
Mineral Resources: 5.3 million ounces
Mineral Reserves: 1.2 million ounces
• Turnaround at Damang was sustained through 2014
• Re-assessing all options at Damang across the entire mining lease to derive a strategy to drive the best cash-generative plan
• The full mining lease underwent a prospectivity assessment in 2014 to identify and rank brownfield opportunities. A strike of 8km contiguous to the Damang pit provides upside potential with a further 15km of strike trending south-west toward Tarkwa reflecting a prospective corridor for ongoing near-mine exploration. Following this assessment, a three-year phased exploration programme has been profiled that will commence in 2015.
• LoM extended to 2020 (six years).
Tarkwa Gold Mine
Mineral Resources: 9.6 million ounces
Mineral Reserves: 7.5 million ounces
• Solid and consistent anchor for growth in the West Africa region
• Owner-operated, high-volume, grade-driven surface operation
• Low-margin reserves removed from the plan
• Maintaining capital waste strip rates to secure a steady flow of consistent grade ore
• Focus on maintaining high mining fleet and processing efficiencies
• Life-of-Mine extends to 2031 (17 years).
Gold Fields’ West Africa region – Damang and Tarkwa – accounts for 14% of the gold mineral resource and 17% of the gold mineral reserve base, excluding growth projects. Gold Fields also has mines in the Americas, Australasia, South Africa and the Netherlands.