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Tropicana Gold Project Progress Update
AngloGold Ashanti Limited
(Incorporated in the Republic of South Africa \ Reg. No. 1944/017354/06)
ISIN No. ZAE000043485 – JSE share code: ANG \ CUSIP: 035128206 – NYSE share code: AU
Website: www.anglogoldashanti.com
News Release
31 January 2013
Tropicana Gold Project Progress Update
The Tropicana Gold Project (AngloGold Ashanti Ltd 70% and manager, Independence
Group NL 30%) remains on schedule to begin production in the December 2013 quarter.
Located 330 kilometres east-northeast of Kalgoorlie in Western Australia, the project was
approved in November 2010.
Since that time Tropicana’s Mineral Resource (100% project) has grown by 2.8 million
ounces, and the potential for extensions to the known ore zones and the discovery of
additional ore within trucking distance of the processing plant remains high.
The Mineral Resource (100% project), as at 30 December 2012, has grown to 118 million
tonnes grading 2.08 grams per tonne containing 7.89 Moz of gold*. This growth primarily
reflects additional drilling carried out as part of the Havana Deeps Pre-Feasibility Study
(PFS), targeting the down plunge and along-strike extents of the Havana ore body outside
the current Havana Pit.
Gold production in the first three years of operation remains in the range of 470,000-
490,000 ozpa (100% project) at slightly increased cash costs of between A$590/oz-
A$630/oz**, compared to a forecast of A$580/oz-A$600/oz at approval. The increase is
largely due to higher fuel prices, which were also impacted by the reduction in fuel rebates
associated with the introduction of the carbon tax.
At approval, Tropicana had a life of 10 years and exploration success has extended this to
more than 11 years.
Life of mine (LOM) production has increased slightly to 3.6 Moz from 3.45 Moz at approval,
while LOM cash costs remain in the original range of A$710/oz-A$730/oz. It is likely LOM
production will increase as more of the Mineral Resource is converted into Ore Reserves.
Ore Reserves have increased by 0.5 Moz (an increase of 15%) since approval to 56.4 Mt at
2.16 g/t for 3.91 Moz. Updated Ore Reserves will be released on completion of the Havana
Deeps PFS which is examining the economic trade-off between open pit and underground
mining of the Havana Deeps Mineral Resource. The PFS will be completed during 2013.
*See ASX announcement on 4 December 2012 for full details of the Mineral Resource. AngloGold
Ashanti’s website at www.anglogoldashanti.com has full details of the Mineral Resources and the
Ore Reserve.
** Based on an average AUD:USD exchange rate for the period of 0.9537 and an average oil
price of US$113.3/bbl
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Engineering design and procurement activities are now complete and all major equipment
items have been delivered to the site. At the end of the December 2012 quarter
construction was 55.6% complete.
With the award during the quarter of the major Structural, Mechanical & Piping (SMP) and
Electrical & Instrumentation (E&I) contracts, the Joint Venture partners can now provide an
update on the project capital costs.
On a 100% project basis, the estimated capital expenditure has increased to between
A$820-A$845 million*. This represents an 11% increase on the mid-point of the capex
range forecast at the time the project was approved in November 2010. At that time capital
expenditure (nominal) was forecast to be between A$725-$775 million.
AngloGold Ashanti CEO Mark Cutifani attributed the higher forecast to significant increases
in construction labour costs and decreased productivity, which had resulted in higher on-
site labour requirements. However, in the context of AGA this increase is in line with
additional contingencies held at the Board level, with the new estimates consistent with the
top end cost range flagged at the time of approval.
“The West Australian construction market is overheated and this, along with extreme skills
shortages, has impacted labour productivity and subsequently costs,” he said.
“Even in this environment the team has done very well to contain project costs through tight
scope and schedule control, in contrast to many other resources projects currently in
construction.
“Progress to date has confirmed our confidence in the strength of Tropicana and
exploration continues to deliver the upside we believed was present at approval.
“Pre-commissioning will begin in the third quarter leading to the commencement of
production and production ramp-up in the fourth quarter.”
The first phase of mining fleet mobilisation is complete and contractor Macmahon Holdings
commenced mining ahead of schedule, with more than 3.3 million bank cubic metres mined
by the end of 2012. The next phase of mobilisation is scheduled to begin in February 2013.
During the December quarter near mine exploration returned encouraging results at Boston
Shaker and Springbok. Better results included 5 metres at 5.2 g/t from 108 m and 7m at 3.6
g/t from 413 m at Springbok and 9m at 5.4 g/t from 439m at Boston Shaker (see drill hole
detail in Appendix 1).
The down dip extensions of Boston Shaker and Tropicana, along with other nearby targets,
will be tested during 2013. Regional exploration will continue to assess the prospectivity of
the Joint Venture’s large tenement holding in the Tropicana Belt, and numerous targets
have been identified for follow up drill-testing during the coming year.
An exploration budget of A$20 million has been approved by the JV partners for near-mine
and regional exploration in 2013.
*Based on an average AUD:USD exchange rate of 0.98 and an average oil price of US$113/bbl
Sponsor: UBS South Africa (Pty) Ltd
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__________________________________________________________________________________________________________________
Contacts
Tel: E-mail:
Andrea Maxey (Investors & Media) +61 8 9425 4603/+61 400 072 199 amaxey@anglogoldashanti.com.au
Stewart Bailey (Investors) +1 212 858 7701/+1 646 338 4337 sbailey@anglogoldashanti.com
Mike Bedford (Investors) +44 122 593 8483 mbedford@anglogoldashanti.com
Certain statements made in this communication, other than statements of historical fact, 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 achievement of project milestones, the completion and commencement of
commercial operations of certain of AngloGold Ashanti’s exploration and production projects and the completion of acquisitions and dispositions, any plan
regarding the restructuring of any of AngloGold Ashanti’s operations, AngloGold Ashanti’s liquidity and capital resources and capital expenditure and the
outcome and consequence of any potential or pending litigation or regulatory proceedings or environmental issues, are forward-looking statements regarding
AngloGold Ashanti’s operations, economic performance and financial condition. These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause AngloGold Ashanti’s actual results, performance or achievements to differ materially from the anticipated
results, performance or achievements expressed or implied in these forward-looking statements. 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, social, political
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 and other factors, refer to AngloGold Ashanti's annual report for the year ended 31 December 2011, which was distributed to shareholders
on 4 April 2012, the company’s 2011 annual report on Form 20-F, which was filed with the Securities and Exchange Commission in the United States on 23
April 2012 and the prospectus supplement to the company’s prospectus dated July 17, 2012 that was filed with the Securities and Exchange Commission on
July 25, 2012. These factors are not necessarily all of the important factors that could cause AngloGold Ashanti’s actual results to differ materially from those
expressed in any forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results.
Consequently, stakeholders are cautioned not to place undue reliance on forward-looking statements. 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, except to the extent required by applicable law. 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.
This communication may contain certain “Non-GAAP” financial measures. AngloGold Ashanti utilises certain Non-GAAP performance measures and ratios
in managing its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the reported operating results or cash
flow from operations or any other measures of performance prepared in accordance with IFRS. In addition, the presentation of these measures may not be
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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 / JSE Compliance:
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 Ore Reserves is based on information compiled by Salih Ramazan, a full-time employee of AngloGold Ashanti
Australia Ltd, who is a member of the AusIMM. Salih Ramazan 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. Salih Ramazan consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
Appendix 1: Drill hole details Boston Shaker & Springbok
Collar Details Significant Intersection Prospect
Northing Easting Azi Dip Total Depth Depth Width Au
Hole No. RL
(M) (M) (deg) (deg) Depth From To (M) (G/T)
SKRC015 6766107 652627 334.2 270.0 -60.0 132 111.0 113.0 2.0 1.1 Springbok
SKRC019 6765505 652658 337.7 270.0 -60.0 132 105.0 112.0 7.0 3.6 Springbok
including 106.0 110.0 4.0 5.9
SKRC020 6765448 652686 338.2 270.0 -60.0 140 119.0 133.0 14.0 1.2 Springbok
including 120.0 124.0 4.0 2.5
SKRC021 6765400 652594 339.3 270.0 -60.0 120 53.0 55.0 2.0 1.3 Springbok
SKRC022 6765302 652681 339.7 270.0 -60.0 120 62.0 64.0 2.0 3.3 Springbok
SKRC026 6765099 652604 342.2 270.0 -60.0 102 16.0 18.0 2.0 1.5 Springbok
SKRC040 6765800 652649 334.6 270.0 -60.0 132 108.0 113.0 5.0 5.2 Springbok
SKRC043 6765386 652687 338.7 270.0 -60.0 150 108.0 112.0 4.0 2.2 Springbok
BSD050A 6763710 652445 347.5 313.0 -60.0 435.5 405.0 420.0 15.0 2.6 Boston Shaker
including 406.0 410.0 4.0 3.0
and 413.0 420.0 7.0 3.6
BSD054 6763775 652512 347.0 315.0 -60.0 467.9 439.0 448.0 9.0 5.4 Boston Shaker
BSD056 6763850 652518 346.7 315.0 -60.0 102 77.0 79.0 2.0 2.6 Boston Shaker
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Date: 31/01/2013 08:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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