"Our regional strategy is to grow the current portfolio by considering opportunities in the M&A space, exploration, productivity improvements and cost optimization."

Alfred Baku

EXECUTIVE VICE PRESIDENT AND HEAD OF WEST AFRICA, GOLD FIELDS

September 28, 2020

Could you give us a brief understanding of Gold Fields’ history in Ghana?

Gold Fields has been active in Ghana for more than 26 years, and we currently operate two mines, Tarkwa and Damang, and also have a JV agreement with Galiano Gold for the Asanko mine. Through our experience in the country, we have come to understand the culture, the business environment, and the people too, and it is worthwhile to mention that Ghana’s democracy is mature and very politically stable. West Africa represents 34% to 37% of the overall production of Gold Fields, so it is a very important region for the Group.

The mine life of Tarkwa, Gold Fields’ first and largest mine, was extended through the Akontansi Underlap. What is the current strategy to delineate further resources at this deposit?

Tarkwa continues to be the Group’s flagship mine, and it has maintained a steady production at more than 500,000 oz/year. Because it is a low-grade resource, we need to mine large volumes and our experience has helped us maximize mining recovery. Over the years, I believe we did not give Tarkwa a fair chance for exploration, and so we have now changed our strategy and launched an aggressive exploration program. Through this exploration agenda, we were able last year to replace the annual depletion of mineral reserves for the first time in 15 years. The mine has another 15 years of life left – at the present level of reserves – and a processing capacity of about 14 million tons/year.

How successful has the Damang reinvestment project been?

Damang is a high-grade mine compared to Tarkwa and has a current life of mine of about five years, but we believe this can be further extended, as we have already increased our reserves through exploration. Gold Fields started the reinvestment plan in 2017, and we are ahead of our production targets and we have also reduced our cost base. Currently, Gold Fields is planning another round of studies to further push towards the eastern side of the existing pits, which will extend the life of mine beyond five years.

Could you summarize how does the Asanko acquisition fit within the broader strategy of the Group?

Our regional strategy is to grow the current portfolio by considering opportunities in the M&A space, exploration, productivity improvements and cost optimization. What informed our decision to enter into a JV agreement with Asanko is the huge upside potential for exploration, which Gold Fields can tap into thanks to our depth of expertise. This mine is operated by Galiano Gold (previously Asanko Gold), but we work closely with them in joint management committees.

With most of Ghana’s gold development projects being brownfield, how is the current tax system influencing (the lack of) greenfield exploration?

Ghana is comparatively less attractive to other countries when looking at the benchmark for fiscal incentives in terms of exploration. Through the Ghana Chamber of Mines, we and our peers are in discussions with the government to review the current fiscal regime to attract more investors. The country is endowed with rich deposits, but without exploration, gold resources will simply reach exhaustion.

What are the biggest challenges that Ghana will need to overcome to maintain its crown as the top gold producer on the continent?

Illegal mining activities remain a significant challenge to the country, and the industry is currently collaborating with the government to find the best solutions. The government has started a concept known as community mining scheme, but at Gold Fields, we decided to launch our own initiative which entails ceding areas of limited mining importance from our mining lease to the government for use by local artisanal miners. Another challenge that affects mining in Ghana is the high electricity, fuel and reagent costs, which make operations very expensive.

Do you have a final message?

A big focus for Gold Fields in Ghana is to develop the region. We manage and fund the Gold Fields Ghana Foundation, which supports local communities in education, health, water and sanitation, infrastructure, and agriculture. Through the Foundation, we run legacy projects, such as building the road between Tarkwa and Damang, and modernizing the Tarkwa soccer stadium. In the future, we plan to upgrade government hospitals within our communities and, with the help of our mining peers, we hope to build the first airport in Tarkwa.

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