Gold Fields Ghana production fell by four percent to 838,000 ounces (koz) in 2022 from 871, 000 (koz) in 2021, primarily driven by decreased production at the Damang Mine due to completion of the Damang pit cutback as well as lower production at Asanko.
The Company in a statement indicated that all-in costs across the three mines – Tarkwa, Damang and Asanko – increased by 10 percent to US$1,220/oz in 2022 from US$1,112/oz in 2021. However, the mines produced adjusted free cash flow, excluding Asanko, of US$219million in 2022 compared to US$292million in 2021.
Its interim Chief Executive Officer (CEO), Martin Preece, in a statement noted that assets in the company’s portfolio are maturing and reaching the end of their lives, highlighting low output by the Damang Mine.
“There are assets in the portfolio which are maturing and reaching the end of their lives. 2022 was the last year of steady-state production at Damang post reinvestment in the pit cutback. In 2023, production from Damang will come from a combination of ore from the Huni pit and stockpiles, with only stockpiles being treated from 2024 onward,” the interim CEO said.
The company is concerned with the political and economic environment in the country, particularly in the latter part of 2022 and early part of 2023.
“We continue to engage with government individually and through industry bodies to reiterate our stance on key fiscal matters. The process of claiming certain rebates relating to our development agreements has become more onerous,” he said.
Gold Fields says it has limited organic growth opportunities in its current portfolio, and as such will need to pursue inorganic opportunities to bolster the pipeline. These options will include green field targets, development projects or bolt-on acquisitions of producing assets.
Production
Damang gold production decreased by 10 percent to 230,000oz in 2022 from 254,400oz in 2021 due to lower yield as a result of lower grade of ore processed. Yield decreased by 11 percent to 1.50g/t in 2022 from 1.68g/t in 2021. This was due to the completion of Damang Pit in November 2022, and mining through transition in the lower grades of Huni pit.
Total tonnes mined decreased by 11 percent to 21.3mt in 2022 from 24.0mt in 2021 – which was planned as Damang Pit Cut Back (DPCB) was scheduled to be completed in November 2022.
Ore tonnes mined decreased by 29 percent to 5.9mt in 2022 from 8.3mt in 2021 due to the depletion of DPCB, which was forecasted to be completed in November 2022.
Damang generated adjusted free cash flow of US$58million in 2022 compared to US$98million in 2021 due to lower revenue resulting from lower gold sold, higher capital expenditure and higher cost of sales before amortisation and depreciation in 2022.
Tarkwa gold production increased by 2 percent to 531,600oz in 2022 from 521,700oz in 2021, mainly due to higher tonnes processed and improved yield. Yield increased by 1 percent to 1.18g/t in 2022 from 1.17g/t in 2021 due to higher grades processed. Ore rehandled from stockpiles was 1,250kt at a head grade of 1.42/t in 2022 compared to 3,336kt at a head grade of 0.78g/t in 2021.
Tarkwa generated adjusted free cash flow of US$161million in 2022 compared to US$194million in 2021, mainly due to higher capital expenditure and higher cost of sales.
Asanko (Equity-accounted Joint Venture) gold production decreased by 19 percent to 170,300oz (100 percent basis) in 2022 from 210,200oz (100 percent basis) in 2021, of which 76,700oz (2021: 94,600oz) was attributable to Gold Fields. The decrease was mainly due to lower yield, which decreased by 17 percent to 0.91g/t in 2022 from 1.10g/t in 2021. The lower yield was a direct result of lower grade ore processed from stockpile in 2022 compared to higher grade fresh ore and stockpiles in 2021.
Gold mined decreased by 63 percent to 94,500oz (100 percent basis) in 2022 from 257,100oz (100 percent basis) in 2021 due to the temporary cessation of mining activities in July 2022. Total tonnes mined decreased by 80 percent to 8.6mt in 2022 from 43.7mt in 2021 due to the temporary cessation of mining activities in July 2022.
Asanko generated adjusted free cash flow of US$42million in 2022 compared to US$25million in 2021, mainly due to lower cost of sales before amortisation and depreciation and lower capital expenditure, partially offset by lower gold sold.
