Triple-listed gold producer Golden Star Resources will in 2017 celebrate true operational transformation at both its mines in Ghana. Not only did its Wassa Underground mine achieve commercial production in January this year, but its Prestea Underground mine is set to follow suit in mid-2017 – enabling the company to deliver higher grades and recoveries with substantially improved capital efficiency, writes Laura Cornish.
Golden Star Resources’ current and future mining potential has always been significant. The company sits on and owns a large track of land – more than 1 100 km² of land on the Ashanti Gold Belt in the western region of Ghana, surrounded by some of the country’s major gold producers including Newmont, Gold Fields, Kinross, Perseus Mining and Asanko Gold.
Golden Star Resources is a shadow of its former self – thanks to a clear strategy to mine the best ounces from its two Ghana-based operations.
And while the company had about 4 Moz of mined gold under its belt from its past (2013 and prior), this comprised high cost, lower grade refractory ore which was expensive to produce.
“We knew the company needed to change direction and in 2013 we started focusing on how to achieve higher recoveries and grades at better margins and lower costs and ultimately become more capital efficient,” states Golden Star Resources CEO, Sam Coetzer.
Considering the company has well defined and installed processing infrastructure (three plants in a 40 m radius), and a “great land package” with different ores, the path to transformation was clear.
[quote]With extensive drilling programmes subsequently completed, GSR successfully brought its Wassa Underground mine on stream last year and celebrated reaching commercial production in January this year.
It’s extremely high grade (14 g/t) Prestea Underground mine is following closely behind and will move into production in June. Both operations will deliver substantially higher grades to their respective process plants.
“This goes a long way to fixing our balance sheet from the company’s previous financial legacy,” continues Coetzer.
“In combination with a board and management team offering strong knowledge of Africa, our transformation to date has been well received by the market and our credibility has improved as we continue to deliver a better value proposition from our mining operations.”
Golden Star Resources’ portfolio now comprises both non-refractory open pit and underground mines which Coetzer adds improves the company’s flexibility, reduces its risk and allows for further optimisation as well.
Wassa Underground kicks into gear
Located 35 km north-east of the town of Tarkwa, the Golden Star Resources 90% owned Wassa mine is accessible by a combination of paved and gravel roads and electric power to the site is available locally from the Ghana power grid.
Having reached commercial production from the underground mine in January, six months after blasting the first stope, gold production is anticipated to continue ramping up during 2017 as Golden Star Resources’ mining operations begin to access the higher grade B Shoot.
Coetzer explains that mining both on surface and at depth occurs from the single B Shoot ore body.
“Because the grade at depth is higher than the grades in the pit we are reducing risk and accelerating cash flow by accessing the same ore body from underground,” explains Coetzer.
The 2.7 Mtpa carbon-in-leach (CIL) plant will process ores with the same metallurgical properties from both mine sections (both mining areas equally optimised for grade) and produce an overall higher grade.
Mining will extend to a depth of around 500 m although the deepest exploration hole drilled reveals the ore body extends to at least 750 m. Wassa Underground is accessed via a twin decline system for ventilation and haulage.
The plan is to begin longitudinal stoping of the B Shoot in the first quarter of 2017; with the larger, transverse stopes expected to be accessed in the third quarter of 2017.
Wassa will from 2018 average 175 000 ozpa over its life of mine production, although Coetzer and his team are evaluating the option to increase the tonnages produced from underground (from about 2 200 tpd to between 3 000 and 3 500 tpd) which will in turn extend the life of the open pit - which based on current reserves and a $1 100/oz gold price - has only another three years of lifespan remaining.
The CEO does however mention plans to drill near surface area targets with the intention of increasing the open pit’s lifespan further as well.
“At an $1 100/oz gold price our underground mine will operate for about seven years but again this is based only on current reserves. There are definitely plans in the pipeline to convert additional resources into the reserve category.”
The Prestea mine comprises two large-scale processing facilities – a 1.5 Mtpa CIL plant currently being used to process open pit tonnages and a 2.7 Mtpa BIOX plant suitable of catering to refractory ore.
Because of the high costs required to run the BIOX plant, it was placed on care and maintenance in 2015.
“Since mid-2015 we have successfully been mining non-refractory 2.3 g/t oxide caps at surface and processing this tonnage through the CIL plant (situated 14 km from the mine) and in fact have recently been exceeding our production rates and producing at a substantially lower cash cost than we have in the past,” states Coetzer.
The mine achieved about $800/oz in the last financial quarter. And while this open pit resource is due to be completed at the end of the year, the onset of Prestea Underground mine will take over from about June/July this year. It will use a form of mechanised shrinkage as its mining method.
Having spent the last two years refurbishing the underground mine which has in its 100 year history produced 9 Moz of gold, the mine is approaching start-up readiness.
“In fact we just intersected the reef we want to mine, which is in resource 20 g/t and in reserve a very high grade 14 g/t, with a significant free gold component as well.”
Once operational, the Prestea Underground mine will look to produce around 90 000 ozpa of gold below $500/oz – “this will be an exceptionally great mine.”
“We do also have an 85 km land strike package in the Prestea mine area and we intend to explore this in order to secure additional surface ore resources, considering the plant will have substantial capacity to handle more tonnage than that generated from underground.”
And while the lifespan of Prestea Underground is currently known to be about five years, Coetzer is confident that when fully operational underground the company will uncover significantly more resources and add to the lifespan dramatically over a short period of time.
Being in Ghana
Having worked all over the globe in places including Fiji, Australia, Brazil, Chile, Canada and the US, Coetzer understands global mining environments and comments on his experiences in Ghana on the back of his in-depth knowledge of global mining jurisdictions.
“Ghana has been a well-established mining country for many years, especially in the gold sector. It has a high education level and often exports mining engineers to other parts of Africa. It also has a strong health system and is a very peaceful territory which is not impacted by terrorism. It is a democratic country which has celebrated peaceful elections for the last few decades. And while the tax structure at 35% may be considered high, the country in return delivers the necessary infrastructure and legislation policies as needed by the industry. Holistically, Ghana remains one of the most sophisticated countries to do business in.”
All images: Golden Star Resources