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ANGLOGOLD ASHANTI LIMITED - Updated Preliminary Economic Assessment for the Gramalote Project in Colombia

Release Date: 21/01/2020 16:26
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Updated Preliminary Economic Assessment for the Gramalote Project in Colombia

AngloGold Ashanti Limited
(Incorporated in the Republic of South Africa)
Reg. No. 1944/017354/06
ISIN. ZAE000043485 – JSE share code: ANG
CUSIP: 035128206 – NYSE share code: AU
(“AngloGold Ashanti” or “AGA” or the “Company”)


21 January 2020

NEWS RELEASE

Updated Preliminary Economic Assessment for the Gramalote Project in Colombia

(JOHANNESBURG – NEWS RELEASE) – The below market statement was published
earlier today by B2Gold Corp., AngloGold Ashanti’s Joint Venture partner in, and manager
of, the Gramalote project in Colombia. Both partners use different gold price assumptions in
calculating Mineral Resources and returns from the project. In addition, the companies are
subject to different regulatory frameworks, notably NI 43-101 for B2Gold and SAMREC for
AngloGold Ashanti.

AngloGold Ashanti will provide all necessary support to B2Gold as it works to advance this
project in one of the world’s most important new gold-producing regions. AngloGold Ashanti
duplicates the B2Gold statement here for information purposes only.



B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) (“B2Gold” or the “Company”)
is pleased to announce positive results from the Updated Preliminary Economic Assessment
(“PEA”) for the Gramalote Ridge deposit (“Gramalote Ridge”) at the Gramalote gold project
in Colombia (the “Gramalote Project”), a joint venture between B2Gold and AngloGold
Ashanti Ltd. (“AGA”). B2Gold assumed the role of the manager of the Gramalote joint venture
on January 1, 2020. All dollar figures are in United States dollars unless otherwise stated.
Highlights
       •    Assuming an effective date of January 1, 2020 and a gold price of $1,3501 per ounce,
            Gramalote Ridge project economic highlights from the PEA (100% basis) include:
            o Open pit gold mine with an initial life of mine (“LOM”) of 13.6 years based on current
               Indicated and Inferred Mineral Resources (for Gramalote Ridge only)
            o LOM gold production of 3.85 million ounces
            o Average annual gold production of 416,600 ounces per year for the first 5 full years
               of production
            o Average annual gold production LOM of 283,990 ounces per year at $544 cash
               operating cost per ounce

1   AngloGold Ashanti will publish its own pricing sensitivities upon completion of the Feasibility Study

                                                                                                                               1
       o   Average LOM all-in sustaining costs (“AISC”) of $648 per ounce of gold, and
           average LOM all-in costs (including pre-production capital costs) of $882 per ounce
           of gold
       o Annual processing rate of 11.0 million tonnes per annum (“Mtpa”)
       o Average LOM gold recovery of 94.3% from conventional milling, flotation and
           cyanide leach of the flotation concentrate
       o Estimated pre-production capital cost of $901 million (includes approximately $160
           million for mining equipment)
       o LOM pre-tax net cash flow of $1,827 million, and after-tax net cash flow of $1,283
           million
       o Assuming a discount rate of 5%, net present value (“NPV”) pre-tax of $1,027 million
           and NPV after-tax of $671 million, generating an after-tax internal rate of return
           (“IRR”) of 18.1% at the project construction decision date (estimated to be January
           1, 2021), with a project payback (including construction capital) of 3.6 years
       o Assuming a gold price of $1,500 per ounce and a discount rate of 5%, NPV pre-
           tax increases to $1,394 million and NPV after-tax increases to $928 million,
           generating an after-tax IRR of 21.9% at the project construction decision date
           (estimated to be January 1, 2021), and reducing the project payback (including
           construction capital) to 3.2 years
   •   Continue ongoing feasibility work to optimize the PEA results and a final feasibility
       study expected to be completed by December 31, 2020
   •   Amended and restated shareholders agreement signed by B2Gold and AGA on
       December 23, 2019 under which B2Gold agreed to sole fund the next $13.9 million of
       expenditures on the Gramalote Project, following which B2Gold and AGA will each
       hold a 50% ownership interest in the joint venture (currently 48.3% B2Gold and 51.7%
       AGA)
   •   Exploration drilling is ongoing at the Trinidad deposit, with additional drilling at the
       Monjas zone to commence later in 2020

The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered
too speculative geologically to have the economic considerations applied to them that would
enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA
based on these Mineral Resources will be realized. Mineral Resources that are not Mineral
Reserves do not have demonstrated economic viability.

B2Gold is currently completing approximately 42,500 metres of infill drilling at Gramalote
Ridge to convert existing Inferred Mineral Resources to an Indicated category, and 7,645
metres of geotechnical drilling for site infrastructure.




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Gramalote Project Mineral Resource Estimate

The Mineral Resource estimate for the overall Gramalote Project (100% basis), effective
December 31, 2019, within a pit shell run at a gold price of $1,500 per ounce, includes:

Indicated Mineral Resource Estimate

                                                                   Gold grade            Contained Gold
 Area                                        Tonnes                   (g/t)                 Ounces
 Gramalote Sulphide                        78,200,000                  0.85                  2,140,000
 Total Indicated Resources                 78,200,000                  0.85                  2,140,000

Inferred Mineral Resource Estimate


                                                                   Gold grade            Contained Gold
 Area                                        Tonnes                   (g/t)                 Ounces
 Gramalote Oxide                            6,000,000                  0.61                   120,000
 Trinidad Oxide                             3,100,000                  0.55                   50,000
 Subtotal Oxide Inferred                    9,100,000                  0.59                   170,000


 Gramalote Sulphide                        105,600,000                 0.70                  2,370,000
 Trinidad Sulphide                          14,400,000                 0.62                   290,000
 Subtotal Sulphide Inferred                120,100,000                 0.69                  2,660,000


 Total Inferred Resources                  129,200,000                 0.68                  2,830,000

Notes:
1. Mineral Resources have been classified using the CIM Standards.
2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
3. The Qualified Person for the Mineral Resource estimate is Tom Garagan, P.Geo., B2Gold’s Senior Vice
President, Exploration.
4. Mineral Resources are reported on a 100% project basis (B2Gold currently holds a 48.3% attributable interest
with the remaining 51.7% interest held by AGA).
5. Mineral Resources for Gramalote assume metallurgical recoveries of 83.9% for oxide and 95% for sulphide,
and operating cost estimates of an average mining cost of $2.13/t mined, processing cost of $3.35/t processed
for oxide and $6.58/t processed for sulphide, general and administrative cost of $1.89/t processed and selling
cost of $50.52/oz produced.
6. Mineral Resources for Trinidad assume metallurgical recoveries of 81.7% for oxide and 90.9% for sulphide,
and operating cost estimates of an average mining cost of $1.82/t mined, processing cost of $3.35/t processed
for oxide and $6.58/t processed for sulphide, general and administrative cost of $1.89/t processed and selling
cost of $50.52/oz produced.
7. Mineral Resources for Gramalote and Trinidad are reported at cut-offs of 0.15 g/t gold for oxide and 0.20 g/t
gold for sulphide.
8. All tonnage, grade and contained metal content estimates have been rounded; rounding may result in apparent
summation differences between tonnes, grade, and contained metal content.




                                                                                                               3
PEA Overview

The Gramalote Project is located in central Colombia, approximately 230 kilometres (“km”)
northwest of Bogota and 120 km northeast of Medellin, in the Province of Antioquia which has
expressed a positive attitude towards the development of responsible mining projects in the
region. The PEA was prepared by B2Gold and evaluates recovery of gold from a an open pit
mining operation that will move up to 143,000 tonnes per day (“tpd”) (50.0 Mtpa), with a
30,137 tpd (11.0 Mtpa) processing plant that includes crushing, grinding, flotation, with fine
grinding of the flotation concentrate and agitated leaching of both the flotation concentrate and
the flotation tails followed by a carbon-in-pulp recovery process to produce doré bullion. The
PEA is based solely on production from the Gramalote Ridge deposit and does not include
potential production from the nearby Trinidad deposit, which has a current Inferred Mineral
Resource estimate (see above), and the Monjas West zone. The Mineral Resource estimate
for Gramalote Ridge that forms the basis for the PEA includes Indicated Mineral Resources of
70,110,000 tonnes grading 0.92 g/t gold for a total of 2,070,000 ounces of gold, and Inferred
Mineral Resources of 79,030,000 tonnes grading 0.79 g/t gold for a total of 2,010,000 ounces
of gold.

The PEA updates and enhances the previous studies on the Gramalote Project in several
areas, including:
•      For Gramalote Ridge, additional drilling has been completed, and a new Mineral
       Resource model has been developed
•      The PEA is based solely on Gramalote Ridge Mineral Resources, where the previous
       studies included mining and processing ore from Trinidad deposit and the Monjas West
       zone
•      Recent metallurgical test work has resulted in slightly lower processing costs and
       improved economics
•      The new Mineral Resource model for Gramalote Ridge includes new interpretations of
       higher grade ore zones and has allowed more efficient mine optimization, which has
       resulted in higher grade ore being fed to the plant during the first years of production,
       significantly improving project economic
•      Due to better defined high-grade zones in Gramalote Ridge in the block model, the
       overall gold grade for the PEA is 0.85 g/t, which is significantly higher than previous
       studies

Accelerated mining is planned in the early years of production to provide higher grade feed to
the plant while stockpiling lower grade material. The final four years of plant feed are from low
grade stockpiles and oxide ore. Oxide ore, which only makes up about 3% of the plant feed,
will be stockpiled and processed at the very end of the project life as blending this material
with the fresh ore does not yield optimal gold recoveries.




                                                                                               4
The PEA assumptions include revenues using a gold price of $1,350 per ounce and current
prices for fuel, reagents, labor, power and other consumables. The key parameters of the
PEA are presented in the following table (100% basis):


      Production Profile
      Contained gold ounces processed (Mozs)                                           4.082
      Gold Recovery (%)                                                                94.3
      Average gold grade                                                              0.85 g/t
      Gold ounces produced (Mozs)                                                      3.85
      Average gold production for the first five years (ounces)                       416,600
      Average Annual gold production (ounces)                                         283,990
      Mine Life (years)                                                                13.6
      Ore tonnes processed (Mt)                                                        149
      Waste material mined (Mt)                                                        288
      Waste to Ore strip ratio                                                         1.93
      Project Economics - $1,350 per ounce gold price
      Construction Capital ($M)                                                        901
      Sustaining Capital ($M)                                                          103
      Gross gold revenue ($M)                                                          5,198
      Net Cash Flow (pre-tax) ($M)                                                     1,827
      Net Cash Flow (after tax) ($M)                                                   1,283
      NPV5.0% (pre-tax) ($M)                                                           1,027
      NPV5.0% (after tax) ($M)                                                         671
      IRR (after tax) (%)                                                              18.1
      Payback (years)                                                                   3.6
      Unit Operating Costs
      LOM Cash Operating Costs (mining, processing & site G&A) ($/oz gold)             544
      LOM All-In Sustaining Costs (“AISC”) (Cash Operating Costs + royalties,          648
      corporate G&A, selling costs and silver credits, and excluding pre-production
      capital costs) ($/oz gold)
      LOM All-in Cost (AISC and pre-production capital costs) ($/oz gold)              882
      Average LOM mining cost ($/t mined)                                              2.16
      Average LOM processing cost ($/t processed)                                      5.61




                                                                                                 5
Based on the positive results from the PEA, B2Gold believes that the Gramalote Project has
the potential, to become a large low-cost open pit gold mine, subject to completion of ongoing
infill drilling and the results of a final feasibility study expected by the end of 2020. The
Gramalote Project has several key infrastructure advantages, including:
•      Reliable water supply – high rainfall region and located next to the Nus River
•      Adjacent to a national highway, which connects directly to Medellin and to a major river
       with port facilities, capable of bringing supplies by barge to within 70 kilometres of the
       site
•      Proximity to the national electricity grid with ample low-cost power and stable record
       of hydroelectric power
•      Skilled labor workforce within Colombia

In addition, B2Gold expects the Gramalote Project to benefit from several key operational
advantages, including:
•      Excellent metallurgical characteristics of the ore, which results in high recovery rates
       at low processing costs
•      Relatively low strip ratio in the mine (1.9:1)
•      Ability to mine and process higher grade ore in the initial years of the mine life resulting
       in improved project economics

The PEA is subject to a number of assumptions and risks, including among others, that a
Modified Environment Impact Study and a Modified Project Implementation plan will be
approved within the required timeline, all required permits and other rights will be obtained in
a timely manner, the Gramalote Project will have the support of the local government and
community, the regulatory environment will remain consistent and no material increase will
have occurred to the estimated costs.

Economic Sensitivities

Gramalote is a large, low grade, low cost project and sensitive to the gold price, as
demonstrated in the following table:

                   Gold Price                   NPV5%              After Tax IRR
                   ($/ounce)                     ($M)                   (%)
                                       Pre Tax       Post Tax
                     $1,250             $783            $497           15.2%
                     $1,300             $905            $585           16.7%
                     $1,350            $1,027           $671           18.1%
                     $1,400            $1,150           $757           19.4%
                     $1,450            $1,272           $842           20.7%
                     $1,500            $1,394           $928           21.9%
                     $1,550            $1,516           $1,014         23.2%
                     $1,600            $1,638           $1,099         24.3%
                     $1,650            $1,761           $1,185         25.5%




                                                                                                 6
Project Next Steps

B2Gold and AngloGold have agreed on a budget for the feasibility study on the Gramalote
Project of approximately $37 million through the end of 2020. This budget will fund 42,500
metres of infill drilling to convert existing Inferred Mineral Resources to the Indicated category,
and 7,645 metres of geotechnical drilling for site infrastructure. The Company currently
expects to complete all drilling by the end of May 2020. In addition, the budget will fund
feasibility work including an updated Mineral Resource estimate, detailed mine planning,
ongoing environmental studies, additional metallurgical test work, engineering and detailed
economic analysis.

The Gramalote joint venture will continue to advance resettlement programs, establish
coexistence programs for small miners, work on health, safety and environmental projects and
continue to work with government and local communities on social programs. B2Gold, as
manager, plans to continue the feasibility work with the goal of B2Gold completing a final
feasibility study by December 31, 2020. Due to the amount of work completed by AGA over
the past several years, including extensive testing programs, the work with local communities
and small miners, and the high level of engineering performed in 2017 for an internal study,
the work remaining to reach final feasibility is not extensive. The main work program for
feasibility is infill drilling to confirm and upgrade the Inferred Mineral Resources to the Indicated
category.
The Environmental Impact Study and Project Implementation Plans for the Gramalote Project
have been fully approved by the National Authority of Environmental Licenses of Colombia.
Due to the desired modifications to the processing plant and infrastructure locations, a
Modified Environment Impact Study and a Modified Project Implementation plan were
submitted and are currently in the final approval process. If the final economics of the feasibility
study are positive and the joint venture makes the decision to develop Gramalote as an open-
pit gold mine, B2Gold would utilize its proven internal mine construction team to build the mine
and mill facilities and operate the mine on behalf of the joint venture.

Qualified Persons

Tom Garagan, Senior Vice President of Exploration at B2Gold, a qualified person under NI 43-
101, has approved the scientific and technical information regarding exploration matters and
the Mineral Resource estimate contained in this news release.

Bill Lytle, Senior Vice President, Operations at B2Gold, a qualified person under NI 43-101,
has approved the scientific and technical information related to operations matters contained
in this news release. Mr. Lytle has visited the Gramalote Project several times since 2009 and
has reviewed the mining operations and has reviewed the technical aspects of the PEA that
form the basis for this release.

About B2Gold Corp.

B2Gold is a low-cost senior gold producer headquartered in Vancouver, Canada. Founded in
2007, today, B2Gold has three operating gold mines and numerous exploration and
development projects in various countries including the Philippines, Namibia, Mali and


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Colombia. In 2020, B2Gold forecasts consolidated gold production of between 1,000,000 and
1,055,000 ounces.

Ends

Johannesburg

JSE Sponsor: The Standard Bank of South Africa Limited

CONTACTS

Media

Chris Nthite +27 11 637 6388/+27 83 301 2481
cnthite@anglogoldashanti.com

General inquiries
media@anglogoldashanti.com

Investors

Sabrina Brockman +1 646 880 4526/ +1 646 379 2555
sbrockman@anglogoldashanti.com

Yatish Chowthee +27 11 637 6273 / +27 78 364 2080
yrchowthee@anglogoldashanti.com

Fundisa Mgidi +27 11 637 6763 / +27 82 821 5322
fmgidi@anglogoldashanti.com


Certain statements contained in this document, other than statements of historical fact, including, without limitation, those
concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, total cash costs,
all-in sustaining costs, all-in costs, cost savings and other operating results, productivity improvements, growth prospects and
outlook of AngloGold Ashanti’s operations, individually or in the aggregate, including the achievement of project milestones,
commencement and completion of commercial operations of certain of AngloGold Ashanti’s exploration and production projects
and the completion of acquisitions, dispositions or joint venture transactions, AngloGold Ashanti’s liquidity and capital resources
and capital expenditures and the outcome and consequence of any potential or pending litigation or regulatory proceedings or
environmental health and safety issues, are forward-looking statements regarding AngloGold Ashanti’s operations, economic
performance and financial condition. These forward-looking statements or forecasts 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 and forecasts 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
and political and market conditions, the success of business and operating initiatives, changes in the regulatory environment and
other government actions, including environmental approvals, fluctuations in gold prices and exchange rates, the outcome of
pending or future litigation proceedings, and business and operational risk management. For a discussion of such risk factors,
refer to AngloGold Ashanti’s annual report on Form 20-F for the year ended 31 December 2018, which has been filed with the
United States Securities and Exchange Commission (SEC). 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, readers 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 the date hereof 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.

The financial information contained in this document has not been reviewed or reported on by the Company’s external auditors.

Non-GAAP financial measures

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 comparable to similarly titled
measures other companies may use.

Website: www.anglogoldashanti.com


END



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Date: 21-01-2020 04:26:00
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