Wrap Text
ANG - AngloGold Ashanti Limited - Anglogold Ashanti announces Tropicana Gold
Project Development approved
AngloGold Ashanti Limited
Incorporated in the Republic of South Africa
Registration Number: 1944/017354/06)
ISIN Number:ZAE000043485
JSE Share Code: ANG
("AngloGold Ashanti/Company")
ANGLOGOLD ASHANTI ANNOUNCES TROPICANA GOLD PROJECT DEVELOPMENT APPROVED
Development of the Tropicana Gold Project in Western Australia has been
approved by the Boards of AngloGold Ashanti Ltd and Independence Group NL.
AngloGold Ashanti has a 70% interest in the Project, which is located 330
kilometres east-northeast of Kalgoorlie in WA, and Independence Group has 30%.
The approved project will produce 3.45 million ounces of gold over a 10 year
mine life at a cash cost of A$710-A$730/oz (US$696/oz-US$715/oz*). In the first
three years of operation, gold production will be between 470,000-490,000 ozpa
at a cash cost of A$580/oz-A$600/oz (US$568/oz-US$588/oz*).
Capital expenditure, including pre-production operating costs, is estimated
at A$690-A$740 million (Real) or A$725-A$775 million (Nominal - including
escalation). At current exchange rates* this equates to US$676-US$725 million or
US$711-US$760 million, respectively. The higher production rate in the first
three years will contribute to accelerated payback.
Discovered in a remote, barely-explored area not previously thought
prospective for gold, Tropicana is the most significant gold discovery in
Australia for more than a decade. The Tropicana Joint Venture`s first mover
advantage has enabled it to peg the bulk of what is now recognised as a major
new gold field.
Construction will begin in the June quarter of 2011 and first gold is
anticipated in the December quarter of 2013.
"Tropicana is the first of AngloGold Ashanti`s major gold discoveries to
move into production," said CEO Mark Cutifani. "We`re delighted to give the
green light to its development."
"This is a clear demonstration of the impact an innovative, results-driven
exploration program can have on organic growth," Cutifani said.
"It`s gratifying to be developing our own projects at a time when so many
majors are forced to pay huge premiums to fill their project pipelines."
The decision to commit to development follows the successful outcome of a
Bankable Feasibility Study (BFS) based on open cut mining of the Tropicana and
Havana deposits. The BFS does not take into account possible production from the
Boston Shaker or Havana Deeps deposits.
The approved project will utilise conventional drill and blast, truck and
excavator open cut mining methods carried out by a mining contractor. The 5.8
million tonnes per annum capacity (fresh ore) process plant has been designed
for water and energy efficiency, with the comminution circuit comprising two-
stage crushing, high pressure grinding rolls and ball milling, followed by a
carbon-in-leach circuit for gold recovery (see Figure 1).
The BFS was based on a Proved and Probable Reserve of 48 Mt grading 2.2 g/t
for 3.4 million ounces of gold (see Table 1 in Appendices). The BFS mining
inventory totalled 59 million tonnes grading 2.0 g/t for 3.8 million ounces.
Whilst the initial mine life is estimated at 10 years, the Joint Venture
partners are confident this can be extended.
Step-out exploration drilling in late 2009 returned significant results from
the Boston Shaker prospect, which lies approximately 360m north of Tropicana
resource. Drilling to date has identified the faulted offset of Tropicana
mineralisation over an 850m strike length and the mineralisation remains open at
depth (see Figure 2).
An open pit scoping study based on data available to July 2010 has been
completed on Boston Shaker and indicates that an expansion to the current BFS
open pit resource is highly likely. Boston Shaker progressed into full
feasibility study in September 2010, with completion targeted for the first half
of 2011.
Significant results were also received from the Havana Deeps prospect, which
represents extensions of the Havana mineralised system external to the Havana
open pit.
The recently-completed Havana Deeps scoping study, based on drilling data to
the end of July 2010, indicates the potential viability of underground mining at
Havana Deeps (see Figure 4).
Although it is too early to determine the scale or timing of underground
mining, it could commence in parallel with open pit mining, once a suitable
portal position is available in the open pit. It is anticipated that Havana
Deeps will progress into a pre-feasibility study in early 2011.
The potential of Havana Deeps has been highlighted by a recent deep step-out
exploration drill hole, which intersected the mineralised package at 1km depth,
in excess of 2.1 km down plunge of the Havana open pit design. Assay results are
awaited (see Figure 5).
Work is in progress to incorporate the results of the Boston Shaker and
Havana Deeps scoping studies, along with subsequent drilling results, into a
revised resource estimate by year-end.
Encouraging intersections have also been returned by recent infill RC
drilling at the Crouching Tiger Prospect, 250m south of the Havana South BFS pit
outline, including 11m @ 5.27 g/t from 102m, 13m @ 1.47 g/t from 147m (including
7m @ 2.27g/t) and 10m @ 1.69 g/t (including 4m @ 3.24g/t). (Table 2; Figure 2)
In addition to the upside in the immediate mine area, the Joint Venture has
more than 30 exploration targets within trucking distance of the mine, along
with numerous anomalies on its 16,000 square kilometre tenement holding in the
highly prospective Tropicana Belt (see Figure 6).
Graham Ehm, EVP Australasia, said Tropicana would add to production from the
100% owned Sunrise Dam mine to lift AngloGold Ashanti`s Australian gold output
to 600,000 ounces per annum by 2014.
"Tropicana will rank as the fifth largest contributor to the company`s global
production in its first three years and will double the operating cash surplus
generated by the Australian region," Ehm said.
He said the Project would employ up to 550 people during construction, and up
to 450 people during operations, as well as contributing an estimated A$836
million to the WA economy during construction and a further A$825 million during
operations**.
Infrastructure will include 220 km of new road from Pinjin to the site, a
sealed all-weather airstrip and development of a borefield 50 km from the mine
site for water supply. The mine will operate on a fly-in, fly-out basis.
Tropicana was approved by the WA Minister for the Environment, the Hon Donna
Faragher, in October. Approval by the Federal Minister for Sustainability is
anticipated by the end of the year.
*The USD capex and cash costs were calculated an AUD:USD exchange rate of
0.98 (as at 5 November 2010)
**Based on an independent study by Compelling Economics.
Project Summary
100% Project 70%
Project Approval November 2010 November 2010
Construction Start January 2011 January 2011
Capital Expenditure A$690-A$740 million A$483-A$518 million
(Real) or A$725-A$775 (Real) or A$508-A$543
million (Nominal - million (Nominal).
including escalation).
This equates to US$676- This equates to US$473-
US$725 million or US$508 million or
US$711-US$760 million, US$498-US$532 million
respectively. respectively.
First Production December quarter 2013 December quarter 2013
Plant Throughput 5.8 Mtpa. 4.1 Mtpa
Head Grade 2.01 g/t 2.01 g/t
Gold Recovery 90.4% 90.4%
Average Annual 330,000 - 350,000 ozpa 231,000 - 245,000 ozpa
Production - LOM
Average Annual 470,000 - 490,000 ozpa 329,000 - 343,000 ozpa
Production- First 3
Years
Cash costs LOM A$710/oz - A$730/oz A$710/oz-A$730/oz
(US$696/oz-US$715/oz*) (US$696/oz-US$715/oz*)
Cash costs - first 3 A$580/oz-A$600/oz A$580/oz-A$600/oz
Years (US$568/oz-US$588/oz*) US$568/oz-US$588/oz*)
* AUD:USD 0.98 (as at 5 November 2010)
Table 1: Tropicana Gold Project October 2010 Proved and Probable Reserve
Classification
Category Tonnes (Mt) Gold Grade Contained Gold (Moz)
Proved 24 2.3 1.8
Probable 24 2.1 1.6
Total 48 2.2 3.4
Proved and Probable Ore Reserves have been reported above break-even cut-off
grade of 0.6 g/t for Oxide (Transported, Saprolite) and Sap-Rock (also referred
to as Transition) materials and 0.7 g/t for Fresh material at a nominated gold
price of US$880/oz and an exchange rate of 0.80 AUD:USD (equivalent to
A$1,100/oz) as specified in the Tropicana Gold Project Feasibility Study Charter
(2009).
Table 2: Crouching Tiger Drilling Results
Collar Information Intercept Details
Hole Easting Northing RL Dip Azi From To Width Au
(m) (m) (m) (deg) (deg) (m) (g/t)
TFRC3301 649066.95 6760515.01 367 -61 319 121.00 131.00 10.0 1.69
Including
122.00 126.00 4.0 3.24
173.00 182.00 9.0 1.09
Including
180.00 182.00 2.0 1.86
TFRC3302 649138.92 6760439.65 370 -61 318 147.00 160.00 13.0 1.47
Including
153.00 160.00 7.0 2.27
206.00 208.00 2.0 1.01
TFRC3303 648979.55 6760527.65 365 -60 317 91.00 98.00 7.0 1.1
Including
93.00 97.00 4.0 1.36
102.00 113.00 11.0 5.27
Including
102.00 106.00 4.0 1.08
109.00 111.00 2.0 25.2
TFRC3304 649086.03 6760430.89 370 -61 319 107.00 110.00 3.0 1.5
149.00 152.00 3.0 1.31
Including
150.00 152.00 2.0 1.67
Intercept Parameters: Minimum intercept 2m @ 0.5g/t; Lower cut off grade
0.5g/t; Maximum Consecutive Waste 2m; Minimum intercept grade 1.0g/t.
For further information, please refer to the company`s website
www.anglogoldasanti.com
ENDS
11 November 2010
JSE Sponsor - UBS
Contacts
Andrea Maxey (Australia) Telephone: +61 (0) 8 9425 4603/ +61 (0) 400 072 199
E-mail : amaxey@anglogoldashanti.com.au
Alan Fine (South Africa) Telephone: +27 11 637 6383
E-mail : afine@AngloGoldAshanti.com
Stewart Bailey(Investor) Telephone: +1 2128364303 or +27 82 330 9628
E-mail : sbailey@anglogoldashanti.com
Certain statements made in this communication, including, without limitation,
those concerning the economic outlook for the gold mining industry, expectations
regarding gold prices, production, cash costs and other operating results,
growth prospects and outlook of AngloGold Ashanti`s operations, individually or
in the aggregate, including the completion and commencement of commercial
operations of certain of AngloGold Ashanti`s exploration and production
projects, the completion of announced mergers and acquisitions transactions,
AngloGold Ashanti`s liquidity and capital resources, and expenditure and the
outcome and consequences of any litigation proceedings or environmental issues,
contain certain forward-looking statements regarding AngloGold Ashanti`s
operations, economic performance and financial condition. Although AngloGold
Ashanti believes that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such expectations will
prove to have been correct. Accordingly, results could differ materially from
those set out in the forward-looking statements as a result of, among other
factors, changes in economic and market conditions, success of business and
operating initiatives, changes in the regulatory environment and other
government actions including environmental approvals and actions, fluctuations
in gold prices and exchange rates, and business and operational risk management.
For a discussion of certain of these factors, refer to AngloGold Ashanti`s
annual report for the year ended 31 December 2009, which was distributed to
shareholders on 30 March 2010. The company`s annual report on Form 20-F, was
filed with the Securities and Exchange Commission in the United States on April
19, 2010 and as amended on May 18, 2010. AngloGold Ashanti undertakes no
obligation to update publicly or release any revisions to these forward-looking
statements to reflect events or circumstances after today`s date or to reflect
the occurrence of unanticipated events. All subsequent written or oral forward-
looking statements attributable to AngloGold Ashanti or any person acting on its
behalf are qualified by the cautionary statements herein.
AngloGold Ashanti posts information that is important to investors on the main
page of its website at www.anglogoldashanti.com and under the "Investors" tab on
the main page. This information is updated regularly. Investors should visit
this website to obtain important information about AngloGold Ashanti.
JORC Compliance: The information in this report that relates to Ore Reserves is
based on information compiled by Marek Janas, a full time employee of AngloGold
Ashanti Australia Ltd, who is a member of the AusIMM. Marek Janas has sufficient
experience relative to the type and style of mineral deposit under
consideration, and to the activity which has been undertaken, to qualify as a
Competent Person (or Recognised Mining Professional) as defined in the 2004
Edition of the JORC Code. Marek Janas consents to the release of this reserve
based on the information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on
information compiled by Mark Kent, a full-time employee of AngloGold Ashanti
Australia Ltd, who is a member of the AusIMM. Mark Kent has sufficient
experience relative to the type and style of mineral deposit under
consideration, and to the activity which has been undertaken, to qualify as a
Competent Person (or Recognised Mining Professional) as defined in the 2004
Edition of the JORC Code. Mark Kent consents to the release of this resource
based on the information in the form and context in which it appears.
The information in this report that relates to Exploration Results is based on
information compiled by Mark Doyle, a full-time employee of AngloGold Ashanti
Australia Ltd, who is a member of the AusIMM. Mark Doyle has sufficient
experience relative to the type and style of mineral deposit under consideration
and to the activity that has been undertaken, to qualify as a Competent Person
(or Recognised Mining Professional) as defined in the 2004 Edition of the JORC
Code. Mark Doyle consents to the release of this resource based on the
information in the form and context in which it appears.
Date: 11/11/2010 08:02:01 Supplied by www.sharenet.co.za
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