This is the word from company executive officer: Africa open pit mines, Fritz Neethling, in an exclusive interview with Mining Review Africa.
AngloGold Ashanti is one of the world’s top gold producers, with 21 operations located in ten countries on four continents. The company is listed on the New York, Johannesburg, Ghanaian, London and Australian stock exchanges, as well as the Paris and Brussels bourses. AngloGold Ashanti has an 85% shareholding in the Iduapriem operation, the government of Ghana holds 10% and the Industrial Finance Corporation (IFC) 5%.
Neethling confirms that the company has launched a project to increase throughput by more than 15%, from 3.7 to 4.3 Mtpa. This will lift annual gold production by 10% from 200 000 to around 220 000 oz pa.
“We have planned the upgrade of our CIP plant and implementation has started – the design work is completed and initial construction is underway,” he explains. The project – which will cost in the vicinity of US$45 million (more than R300 million) – includes upgrading of crushing facilities, an additional mill, increased leach capacity and various other minor elements. It has a run time till Q4 of 2008, at which stage full commissioning will take place,” he adds.
As far as annual production is concerned, Iduapriem is expected to exceed the 200 000 oz mark this year – a slight increase over 2006 production of 198 000 oz. “Then, of course, from end 2008 – when the new upgrade kicks in – we will move up to 220 000 oz pa,” says Neethling.
FURTHER EXPLORATION UNDERWAY
“We regard Iduapriem as one of our medium to longlife operations,” he points out. “It has quite significant resources with a fairly long life ahead of it. Based on current prices and reserves we are looking at a life of mine of at least 10 to 12 years – and it has potential further resources. Our published reserves in Dec 2006 were 2.6 m, and the published resource – inclusive of reserve – was 4.1 m,” he discloses.
Looking ahead, Neethling reveals that AngloGold Ashanti is continuing exploratory drilling of the ore body. “We are starting with the studies and the related exploration drilling to define the underground resource and its potential. There is quite a large potential underground resource, but at the low grade of 1.8 g/t it will be tough to make it pay – it is the various potential options that we are studying now,” he adds.
“This is a pre-scoping study – right in the starting blocks – and it will take some time before we reach the feasibility stage,” Neethling explains. None of this work will result in any addition to reserves this year – we will probably start adding part of that to resources, if it proves worthwhile, in 2008 – so it is very early days,” he emphasises.
According to Neethling, because of the low grade, such an operation can really work only if it is a really largescale massive underground mining project, handling huge volumes which would make the cost per unit of mining low enough to make it pay. Traditional stoping methods would not be viable.
SIGUIRI’S NEW CIP PLANT DOES WELL
The Iduapriem upgrade follows hard on the heels of a highly successful CIP plant project at AngloAshanti’s Siguiri mine in Guinea. The company holds 85% of this venture and the government of Guinea has a 15% shareholding.
“Siguiri used to be a heap-leach crushing operation, but the percentage of heap-leachable ore has been reducing steadily,” Neethling explains, “so we built a CIP plant with the intention that 85% of the ore would be milled and leached through it, with the remaining 15% still going through the heap-leach facility.”
Once the new facility was commissioned, it worked so well that AngloGold Ashanti is putting the entire 100% through the CIP. “It is handling a greater capacity than we had expected, and has turned out to be a very good project,” he contends.
“Designed as an 8.5 Mtpa plant, the facility is currently treating very close to 10 Mtpa. Cost of the project was around the US$100 million (R700 million) mark, and the plant is in full operation and running well,’’ Neethling reveals. “From a technical processing point of view it’s been a great success,” he adds.
Gold production at Siguiri this year is expected to reach 310 000 oz – about 8% up on last year’s 287 000 oz. Annual production is expected to continue at a steady 300 000 oz from now on. “There are no growth plans at this time in terms of the current business plan,” says Neethling, “but this could change in the event of finding exciting deposits close at hand.’’
NO DRAMATIC FINDS EXPECTED
Siguiri has a similar mine life to Iduapriem – 10 to 12 years. “I don’t expect dramatic announcements about new finds in this area,” he continues: it’s more a case of just growing the ore body steadily over time – incremental addition.”
Published reserves last December stood at 2 m oz, and resources including reserve amounted to 6 m oz. So there is a lot of potential for converting resource into reserve. It is an even lower grade operation than Iduapriem – about 1g/t – but with a very low stripping ratio of about 1, which is the only way such a low-grade ore body can work.
Looking ahead, Siguiri is one of the mines where the company is spending quite a substantial amount on exploration. “We have quite widely spread exploration concessions in Guinea, and we are currently focusing on an area about 40 km from the current plant infrastructure,” says Neethling. “So it becomes a question of whether or not it is brown-fields – which we define as an ore body that you would treat through the existing infrastructure. If it calls for its own plant and infrastructure it becomes greenfields,” he adds.
“We are not quite sure at this stage whether it will support its own infrastructure, or we will cart ore through to the current one,” Neethling continues, ““but there is certainly a great deal of potential around the current focus area of mining.’’
MALI MINES LIKELY TO CLOSE
Turning to Mali, the Morila mine – a joint venture with Randgold Resources (40% each), with the government of Mali holding the other 20% – is scheduled to continue processing ore until 2012, based on current reserves, according to Neethling. Morila produced more than 4.4 million ounces since commissioning in 2000, and over 1 m oz of gold in 2003 alone. Production in 2005 was reduced to 651 000 oz, dropping to 517 000 oz in 2006. This year’s production is expected to reach the 500 000 oz mark.
A drilling programme is underway to look for another significant ore body. “It is the natural thing to do, while you are operational in the area, to continue to look for another ore body,” he adds, “and it is not inconceivable that there could be one, although it is not easy to find. So we are spending US$6 million (more than R40 million) on exploration in the area this year in an effort to find a new ore body, to delineate it, to find the resource, to bring it in to reserve, to look for near-mine or near-ore body satellite deposits; and secondly to conduct brown-fields exploration further afield,” he insists.
The Sadiola mine is another joint venture, this time between AngloGold Ashanti and IAM Gold of Canada (38% each), with 18% held by the government of Mali and 6% by the IFC.
Production at Sadiola was 500 000 Mt in 2006, and is expected to be about 20% less this year at around 400 000 Mt, due to lower recoveries achieved with sulphides ore. Sadiola was started as an oxide ore mine, and it is now reaching the end of its oxide ore deposits, and moving increasingly into higher percentages of sulphide ore.
A project now in its pre-feasibility stage is underway to consider the possibility of extending the life of the operation beyond the oxide ore to deep sulphides. “Sulphide ores across the world are very difficult, and hence we are now investigating the possibilities of mining them successfully at Sadiola, Neethling reports. “We are looking at all sorts of ways of getting the gold out of this ore in an effort to overcome this challenge and make the mining of deep sulphides possible,” he says.
The Yatela mine – another joint venture between AngloGold Ashanti and IAM Gold (40% each), with 20% held by the government of Mali – is scheduled to cease mining of heap-leach in 2010, and stockpiles a few months later.
“I must point out that this operation was started as a 6.5-year project, and has already exceeded that period. It was meant to have closed at the end of this year, but with the improved gold price and better cost control we have been able to extend its life by another 2.5 years to 2010,” Neethling concludes.