Expansion brightens outlook for Tarkwa

The Tarkwa mine in southwestern Ghana, operated by Gold Fields (GOLD-Q), saw its production increase and its costs go down in the three months ended June 30, reaping the benefits of an earlier expansion in capacity.

The open-pit mine and heap-leach plant produced 81,000 oz. gold in the quarter, an increase of 10% over last year’s second-quarter results. At the same time, costs fell by 16% to US$172 per oz. Gold Fields owns 81.1% of Tarkwa, and Repadre Capital (RPD-T) the rest.

The operating company, Gold Fields Ghana, also bought leach pads, stacking apparatus, and some broken and agglomerated ore from the Teberebie operation, immediately north of Tarkwa. The assets were sold by Pioneer Group (piog-q), which is selling Teberebie to Ashanti Goldfields (ASL-N).

Gold Fields took in quarterly revenue of US$263 million for earnings of US$10 million. Two of its main South African mines — Beatrix and Kloof — had a profitable quarter, even though an explosion in mid-May at Beatrix killed seven miners. Another major South African interest, the Oryx mine, broke even in the same period.

Cash production costs across the Gold Fields group fell to US$207 per oz. in the quarter, down US$10 from their average in the first three months of 2000. The falling price of the South African rand, in U.S.-dollar terms, also contributed to the cost reduction.

Production from Gold Fields mines fell to 920,000 oz. from 959,000 oz. in the previous quarter, with production falling at the Driefontein, St. Helena and Libanon mines. Costs fell at Driefontein, but both St. Helena and Libanon were money-losers during the quarter.