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22.03.2006 Business & Finance

Gold production down in Ghana

By - Reuters

Gold Fields Ghana expects to produce around 900 000 ounces of gold from its operations in the West African company in 2006, slightly lower than 924 000 ounces last year, its managing director said.

Alan Ashworth said continued exploration this year was expected to extend the five-year life of the Damang mine in Ghana, while production from the bigger Tarkwa mine was expected to rise slightly.

Ghana is Africa's second biggest gold producer after South Africa, and for South Africa's Gold Fields Ltd - the majority owner of Gold Fields Ghana - the West African country accounts for about 20% of its overall gold production.

Damang produced 248 000 ounces in 2005 and with proven reserves of 1.3 million ounces and a life of five years, it was forecast to produce just over 200 000 ounces in 2006, he said.

With proven reserves of 13.4 million ounces, the much larger mine at Tarkwa has a life of 20 years and production in 2006 was expected to slightly exceed 2005's 676 000 ounces.

Gold Fields Ghana accounts for about 45% of the SA group's profits thanks to lower costs and its dollar funding, which means it faces less currency risk than the South African operations, which are funded in rand.