Golden Star Resources has made its name by succeeding where others have failed. COO Scott Barr talks to Gay Sutton about developing gold mines and sustainable job creation in Ghana.
Having accrued over 15 years’ experience in gold exploration and production on the Guyana Shield in South America, Golden Star Resources switched tracks and has spent the past 10 years on exploration and mine development in Ghana, a move that has yielded significant rewards. The change in direction began in 1999 with the acquisition of the Bogoso mining licence on the Ashanti Trend in western Ghana, at a time when the price of gold was very low. The property had previously been worked by a number of companies including Billiton, all of whom were unsuccessful through challenging times.
“Much of the gold at Bogoso is refractory, which means that it is extremely difficult to extract from the ore. However, it is plentiful in the area,” explains COO Scott Barr. Taking on such a technically challenging task was a considerable risk at the time. “But our management at that time must have been quite visionary, because it has turned out to be a wise buy.”
Gold generally occurs in two forms—in an oxide, from which it can easily be extracted by grinding and chemical processing; or linked with sulphides, in which case it is resistant to extraction by the usual methods. This is known as refractory gold, and requires extensive chemical or biological processing to render the gold recoverable.
Much of the resource at Bogoso is refractory, but it occurs in good grades and substantial amounts. “The Bogoso mine originally had a small 1.5 million tonne per year oxide gravity-carbon-in-leach CIL plant. But in 2004 we decided to expand the facility by adding a three million tonne per year sulphide processing facility, and that came online in 2007,” Barr says.
Meanwhile, the company also acquired the surface and underground rights for Prestea, another old and defunct gold mine close to Bogoso that had been mined underground for over 100 years. Development has yet to commence due to permitting delays but will be processed in the nearby Bogoso processing plant when approvals are received.
Today, Bogoso involves some 3,800 employees and contractors and operates two plants—a large one utilising new biotechnologies to process the sulphide ores, and a smaller one to process the oxides. Between them, they produce around 200,000 ounces of gold a year, predominantly from sulphide ores.
Meanwhile, in 2004, Golden Star had acquired its second major site in Ghana—Wassa Holdings, which was another unsuccessful mine some 40 kilometres to the east of Bogoso. Wassa came with a heap-leaching facility to process the gold oxides, and the company set about adding to that with a new milling facility and a gold recovery circuit.
The performance and productivity of the Wassa processing plant have been increased through the acquisition of two further sites: Hwini-Butre and Benso, both of which are producing gold. “They are somewhat distant from the mine, so we’ve installed an 80 kilometre road to haul the ore to the processing plant,” Barr explains.
Wassa now involves 1,700 employees and contractors and produces 200,000 ounces of gold a year by processing around three million tonnes of ore, half of which comes from the Hwini-Butre and Benso mines.
Golden Star’s aim is to improve the efficiency and effectiveness of the Bogoso/Prestea and Wassa operations, and further develop the resource that exists around them. A programme of exploration has been underway since the company’s arrival in the country, says Barr. “We have identified quite a few new mine and pit sites, but we haven’t yet started mining them. Some are yet to be permitted, but we are at the stage of modifying our designs. We also found some extensions to our existing deposits—in fact, our geologists found extensions near the Buesichem pit at Bogoso earlier this year.”
Similar activities are going on at Wassa, which has been extensively explored over the last few years. “We’re now expanding our Wassa main pit, but it’s quite an interesting technical challenge as some of it has already been mined before.”
Exploration is an essential element of the company’s growth strategy, and is not confined to Ghana. Out of the $18 million that will be invested in exploration this year, $14 million will be spent on these two Ghanaian properties. The rest will be spent in other areas of West Africa, as well as Brazil in South America.
Unlike many gold mining companies, Golden Star employs a very large number of staff from the areas around the mine. “We also employ people from all over Ghana, but we have very few expatriates. They account for less than one per cent of our employees, which is among the lowest percentage of any mining company in Ghana,” Barr says. This policy obviously presents some challenges in terms of training and education, but the company is continuously investing in its staff.
Golden Star is also very active in supporting the local community. “We commit a certain percentage of our resources to developing sustainable businesses and jobs, with the aim that when we depart there will continue to be something for the people to do,” Barr says. “Funding is provided every year to our Development Foundation and projects are selected by a committee formed by leaders from the communities around the mines.” The committee decides where the money should be spent, and Golden Star then works with them, helping them execute those projects. All the usual needs are being tackled, such as healthcare facilities, schools, roads and markets. And in line with the Ghanaian love of football, a soccer field has been improved.
“We also strongly encourage the government to do more,” Barr says. “We pay substantial taxes and royalties, more of which should be returned to the local people.”
One initiative that Barr is very proud of is the oil palm project which won the 2008 Nedbank Capital Green Mining Award. The company, with the help of the local authorities and chiefs, acquired access to tracts of land around its mines, which were planted with oil palms, the idea being to create a sustainable local industry. The palm oil they produce is in great demand for cooking and other uses; and the company believes this presented a sustainable long term business opportunity for the local community.
“The local chiefs then identified suitable local smallholders and we allocated to them four-hectare parcels of planted land—enough for a family group to maintain,” Barr explains. The initiative has been a great success and has done much to build good relationships with the community. “But this is really only the beginning of the initiative. We have several hundred hectares of land under cultivation so far, and a long line of people waiting to step into the scheme. And at some point in the future, we may consider building a common palm oil processing plant for the community.”
Gold mining undoubtedly forms a substantial part of the Ghanaian economy, and has a long history in the country. “In fact, the Arab traders were trading for Ghanaian gold here long before Europeans arrived,” Barr says.
“What we have done is to take essentially defunct properties that were going nowhere, and turn them into productive mines. We probably feel more Ghanaian than most companies, because all our gold production is in Ghana,” he concludes. “But we still have a great potential for gold here, and for creating good jobs in a sustainable manner.” www.gsr.com
