Gold Fields to shut Damang after Ghana denies lease

Gold Fields (JSE, NYSE: GFI) will cease operations at its Damang mine in Ghana after the government rejected the company’s application to extend the site’s lease expiring on Friday.

The South African gold producer had already stopped mining at Damang in 2023 and was processing stockpiles only. It confirmed on Monday that authorities had instructed it to leave the lease area by the expiry date.

“The government has instructed Gold Fields to cease operations and vacate the lease area by the 18th April on expiry of the lease,” the company said, adding it was “preparing to safely and responsibly cease operations and ensure the safety and security of our people and high-risk operations.”

6% of output

Damang is the smaller of Gold Fields’ two mines in Ghana after Tarkwa, the country’s largest open-pit gold operation. Damang produced 135,000 oz. of gold last year, accounting for about 6% of the group’s total output of 2.15 million ounces.

The company has been reviewing the future of its smaller operations, including Damang and the Cerro Corona mine in Peru, which has less than five years of mine life remaining. Following Gold Fields’ $1.6-billion acquisition of Osisko Mining, the company is shifting its focus to its recently commissioned Salares Norte mine in Chile and the Windfall project in Canada.

Shares of Gold Fields dropped 5.6% in Johannesburg to close at 44.81 rand (C$3.29) on Monday, giving the company a market capitalization of 396 billion rand.