Gold Fields Damang mine has bounced back to profitability after wallowing in losses for months.
Proceeds from the Damang mine are expected to boost the mining giant’s overall revenue.
The Damang mine last year was nearly put up for sale after the mine went ‘under stress’ due to high operational cost trigged by falling gold prices on the global market.
But in its first quarter results for this year the mining giant said the mine has now been restored to sustainable profitability.
Last year Goldfields announced it would take a firm decision on the mine by April this year because the cost of production at the mine was becoming prohibitive and unprofitable.
According to the mining giant nearly half of the gold production in Ghana was “under stress” because of falling world prices at the time.
The company is one of many others that have been affected by the plunge in global prices of gold.
Many mining companies in a bid to stay above the water have announced they will embark on retrenchment exercises to stay in business.
Gold Fields last year laid off about 160 workers and is expected to lay off an additional 300 at its Tarkwa mine this year.
But the latest development at the Damang mine is exciting news for the company and investors.
Output from the mine rose 3% to 46 700 ounces while its costs fell 12% to $1 111 an ounce.
According to the company’s first quarter results for this year the Damang mine has now been restored to sustainable profitability and is expected to make a meaningful contribution to the group’s strategy of generating cash flow for at least the next five years, and likely well beyond that.
By: Vivian Kai Mensah/citifmonline.com/Ghana