South African gold producer Gold Fields, which has mines from Australia to South Africa to Peru, will invest $1.4 billion to extend by eight years the life of its Damang operation in Ghana. The investment, which will be paid over the eight-year period, will keep the mine in operation until 2024.
Nick Holland (pictured), Gold Fields Chief Executive, was quoted by Reuters as saying:
"Damang reinvestment was planned at a gold price of $1,200 an ounce, so we've got some headroom and, importantly, the break even price at Damang is $1,050 an ounce so we've got a $200 ounce cushion before the project starts becoming uneconomic."
Since it first began 20 years ago, Damang has produced over four million ounces of gold, although output declined in recent years, resulting in the company contemplating whether to close the mine. Instead, this investment will see Damang produce 1.56 million ounces of gold - less than half of the mine's four million available ounces of gold resources..
