Ghanaian Australian Goldfields Ltd. (IV)

completed

Summary Of Project Information (SPI)Project NameGhana:Ghanaian Australian Goldfields RegionSub-Saharan AfricaSectorProject No007261Projected Board DateFebruary 20, 1996Company NameGhanaian Australian Goldfields Limited (GAG)Technical Partner and/or Major Shareholders Golden Shamrock Mines Limited (GSM) (70%), IFC (20%), Republic of Ghana (10%).Project Cost Including proposed IFC investment Total project cost is US$13.5 million to be financed by Senior Loans equally by IFC, DEG and FMO, the existing Senior Lenders. IFC’s portion will be US$4.5 million.Location of project and Description of site The project is at Iduapriem in the Western Region of Ghana. The project is located within the existing Mining Lease granted by the Republic of Ghana in 1989.Description of Company and Purpose of Project The project consists of the construction of Heap Leach pads and associated facilities to process low grade ore. The project also includes a national employee housing component. The existing open pit gold mine and a carbon-in-pulp (CIP) treatment plant was commissioned in 1992 to mine and treat 1.5 mtpa of ore to produce 110,000 ounces of gold per annum. Fine tuning after commissioning increased nominal capacity to 2.1 mtpa. High grade ore was to be processed in the initial years of operation with low grade ore to be stockpiled for later processing. Over the last two years GAG has considerably expanded its Reserve and Resource estimates. Based on the additional Reserves, GAG decided to expand processing capacity to 4.0 mtpa. The expansion is being undertaken in two phases. Phase I, an upgrade of the existing CIP plant to allow 2.8 mtpa throughput producing about 150,000 oz of gold per annum, and the provision of Gold Hedging facilities, has been approved by IFC (IFC/R95-141). Phase II, the current project, will heap leach low grade ore from mining operations and from the existing low grade stockpile. Gold production will increase by about 40,000 oz per year for the first two years, and once the ore stockpile is exhausted, incremental production will be about 20,000 oz of gold per year, bring total annual production to about 170,000 oz. The housing component will construct 60 senior staff houses and 150 junior staff houses for Ghanaian staff. The financing package for Phase I and II involves a combination of Shareholder and Senior Loans as well as the introduction of Gold Hedging facilities. IFC, as lead financier of the original mine financing, was requested by GAG to co-ordinate the expansion financing. Gold is Ghana’s largest export product, and Government development strategy emphasizes the continued expansion of the mining sector. The GAG project is consistent with Government strategy and will increase Ghana’s gold exports and the Government of Ghana’s taxation revenues. Environmental Category and Issues This is a category B project according to the IFC’s environmental review procedure because a limited number of impacts may occur, for which there are recognized performance standards and design criteria for minimizing or avoiding impacts. The environmental review comprised a review of the environmental assessment undertaken for the proposed operation, further information supplied by the sponsor and site visits undertaken by Technical and Environmental staff. The existing operation is well run and fully complies with World Bank and host country guidelines and policies. Annual Environmental audits are carried out by the sponsor. Environmental and occupational and health and safety issues associated with this project include cyanide containment, hydrological impacts, particulate emissions, waste disposal, land use modifications and rehabilitation.The is from the Public Information Center. Date SPI sent to PIC January 17, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).