The Mining Review Committee (MRC) was not involved in the Gold Fields Limited Development Agreement with the Government of Ghana for both the Tarkwa and Damang mines, Chairman of the Committee Professor Akilagkpa Sawyerr has revealed.
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 would 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”.
Although the MRC has the mandate as the negotiating team for government, Prof Sawyerr in a statement has said the MRC was bypassed in the negotiations that produced the Gold Fields Development Agreement.
“In the circumstances, I feel obliged as Chairman of the MRC to state categorically that the MRC was not involved in the development of positions nor the conduct of the negotiations that produced the Gold Fields Development Agreements ratified on 17 March, 2016. Indeed, these negotiations were carried out on the blind side of the committee,” observed Prof Sawyerr.
He noted that he did not hear about the negotiations until they were concluded.
“As chair of the MRC, I did not get to hear about the negotiations till after they had been concluded, even though I was in regular contact with the Ministry of Lands and Natural Resources at all times,” he added.
The agreed royalty rates and corresponding prices for the Gold Fields Development Agreements 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.