Gold Fields Ltd., a South African producer of the metal with mines from Australia to Peru, will invest $1.4 billion to extend the life of its Damang operation in Ghana by eight years.
The investment will allow the mine to keep operating until 2024, Johannesburg-based Gold Fields said in a statement Monday. The money will be paid over the eight-year period, it said.
“This is a classic brownfields opportunity,” Chief Executive Officer Nick Holland said in an interview. “It makes logical sense from all angles for us to do this.”
Gold Fields’ shares declined 5.5 percent to 58.01 rand a share by 10:06 a.m. in Johannesburg, cutting this year’s advance to 37 percent.
Damang’s extended life will produce 1.56 million ounces of gold at an all-in cost of $950 an ounce and support 1,850 jobs, the company said.
The project will produce 225,000 ounces of gold a year. Gold was at $1,265.50 an ounce in London today, according to Bloomberg generic pricing.
“This is a first step in what may well be a much longer mine life in time to come,” Holland said. The project will extract less than half of Damang’s 4 million ounces of gold resources, he said.