Anglogold: Development of ore reserves key to long-term success

The development of Ore Reserves is key to the long-term success and sustainability of AngloGold Ashanti, and the company is committed to enhance operating flexibility and extend the lives of its existing mines by converting its mineral resources into better defined ore reserves.

This focused investment programme, now in its first year, is expected to add ounces net of those it depleted through production in 2020 and positions the company to continuously replace ore reserves. During 2020, the company spent $140m on its exploration activities.

“Investment in Ore Reserve replacement and improved development is a high-return, low-risk vital use of capital and is a key part of our strategy,” acting CEO Ramon said. “We are able to leverage off our existing operating footprints, ore body knowledge and skills base which increases the chances of success.”

AngloGold Ashanti continues to see significant geological potential in Tanzania, at its Geita mine, where the Nyamulilima deposit, close to its recently depleted Nyankanga open pit, will likely add new Ore Reserves this year, with more to come in the following year.

The team on site is working to bring the deposit, a near-surface source of oxide ore, into production in late 2021 to supplement growing production from the underground mine.

“The emerging potential at the Nyamulilima deposit, coupled with the solid progress being made in advancing the development from our three underground mining fronts, will ensure Geita remains a tier one asset for many years to come,” said Sicelo Ntuli, AngloGold Ashanti’s COO: Africa. “We have 22 drill rigs working on site at the moment, and we’re very encouraged by the results.”

Elsewhere in Africa, the Company is doing necessary preparatory work, including construction of a haul road, to bring the higher-grade Block 2 deposit at Siguiri mine, in Guinea, into production.

At Iduapriem in Ghana, Cut 7 and Cut 8 waste-stripping which began in recent months is making good progress and will extend through next year, extending mine life to almost a decade. Preliminary work has also started on a new tailing’s facility, to support the longer mine life.

Additional Ore Reserves are expected to be added – net of depletion – at Siguiri, in Guinea; at Obuasi, in Ghana; at AGA Mineração, in Brazil; and at Sunrise Dam, in Australia, where the discovery of the new Frankie ore body and the known Carey Shear underground ore body, adjacent to current working areas, are yielding new ounces.

“Sunrise Dam is a great example of how our focus on scaling-up development and adding Ore Reserves will improve mining flexibility and increase life,” said Ludwig Eybers, AngloGold Ashanti’s COO: International. “We’re making progress in creating this virtuous circle across our portfolio.”

The Obuasi Redevelopment Project, which sits atop a 31Moz Obuasi Mineral Resource, remains on budget and on track to ramp up to a steady-state mining rate of 4,000 tonnes a day. The mine is expected to reach its full production rate in the second half of 2021.

The plan remains for the mine to produce an average of 350,000oz to 400,000oz of gold a year, at an all-in sustaining cost of $800/oz to $850/oz, which is lower than the Company’s average cost of production, and in the lower half of the industry cost curve.

In the second decade of its life, both costs and production will improve further from these levels, as mining fronts reach higher grade parts of the ore body.

“Obuasi will be a world class, high-margin asset for AngloGold Ashanti for well over 20 years,” said Graham Ehm, AngloGold Ashanti’s Executive Vice President: Group Planning & Technical. “It’s a cornerstone asset for us and we’re focused on bringing it into full production in the months ahead.”

The Company intends to make investment decisions on its two Colombian projects in the coming year, namely its wholly owned Minera Cobre Quebradona copper-gold project and the Gramalote joint venture (50:50) with operator B2Gold.

These approvals are likely to be sought in 2021. Once in production, these projects will further improve the cost and life-of- mine profile of AngloGold Ashanti’s portfolio.

“There is excellent progress being made on both projects,” Ramon said. “As we look to their development, we are focused on ensuring affordability, further de-risking the development of these projects, even at much lower commodity prices. Quebradona takes AGA into the copper business, adding an exciting commodity essential for renewable energy and electric vehicle technologies, amongst others, as the world moves towards decarbonisation and lowering emissions in the face of climate change.”

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