Greenfield projects
AngloGold Ashanti’s investment in greenfield exploration and projects in recent years is beginning to bear fruit. To date, five greenfield projects are being advanced and developed further. They are:
- In Colombia, in the Americas region:
- Gramalote; and
- La Colosa.
- In the DRC, in the Continental Africa region:
- Kibali; and
- Mongbwalu.
- In Australia, in the Australasia region:
- Tropicana.
Of these, Tropicana is the most advanced. Together these greenfield projects have Mineral Resources totalling 27.42Moz, of which Ore Reserves account for 6.88Moz.
Americas – Colombia
Gramalote
Description
The Gramalote project is a joint venture owned by AngloGold Ashanti (51% and operator) and B2Gold Inc. (49%). The project is located in the rural Antioquia Department, approximately 110km northeast of the city of Medellin and 220km northwest of Bogota, Colombia. Basic infrastructure consisting of roads, power and water currently serve the site.
The deposit lies in modestly hilly terrain at an elevation of 900m and is characterised as a bulk tonnage, low-grade, intrusive-hosted and structurally-controlled quartz stockwork system within the Cretaceous Antioquia Batholith. Gold mineralisation is associated with stockwork veining and in particular quartz, quartz-pyrite and quartz-carbonate veins.
Surface exploration and mapping of the region indicates these gold-bearing structures have strike lengths of up to 1.5 km and depths of up to 450m. Mineral Resources are currently 37.7Mt at an average grade of 0.90g/t (at 0.4g/t cut-off), for contained gold of 1.09Moz.
Growth prospects
A prefeasibility study of the project is currently under way and is expected to be concluded at the end of 2011. A key aim of the prefeasibility study will be to increase the Mineral Resource by an additional 35Mt of ore at a similar gold grade in order to achieve what is believed to be the deposit’s potential of 86Mt of ore yielding 3.1Moz of gold.
Assuming positive results from the prefeasibility work, progression of project development would include a bankable feasibility study in 2012, after which Gramalote would again be evaluated. Assuming continued positive results, the project would proceed to full construction in 2013. This schedule would see operations and first gold production by around late 2015.
Outlook for 2011
Prefeasibility study work, scheduled to be completed by April 2012, is aimed at expanding the Mineral Resource; purchasing additional land for the project’s development; confirming mining and processing options, facilities and infrastructure requirements and locations; engagement of environmental, social and sustainability programmes; and validation of the project’s economic viability.
The 2011 attributable budget to perform all activities according to schedule is $15m.
Sustainability
Some future sustainability work requires discussions with authorities to reduce the environmental impact caused by artisanal miners who have been operating in the region for several years.
Community
Working relationships with the local authorities have been positive. The project is located in the municipality of San Roque (roughly 20,000 inhabitants), with the Providencia section of about 1,500 inhabitants being closest. The main issue to be dealt with by the project teams involves the formulation and conclusion of agreements with artisanal miners working in the project area. Such agreements will be negotiated during the prefeasibility phase.
Environment
Compliance with the obligations of the licence already issued for the core project tenement is required, while the potential for a larger project is defined and application has been made for a revised licence. Baseline studies will accompany this process during the prefeasibility and feasibility phases of the project. Application for the final licence will follow the environmental impact study, which will include the mitigation and compensation schemes required by law and international best practice.
La Colosa
Description
The La Colosa project is a 100% AngloGold Ashanti-owned development project located approximately 150km west of Bogota, Colombia, in the rural Tolima Department. The project is located near the major regional city of Ibague and is reasonably served by road, power, and water infrastructure.
The deposit lies in mountainous terrain at a mean elevation of 2,800m and is characterised as a copper-poor porphyry gold system, genetically associated with the evolution of a Miocene porphyritic intrusive centre, intruded in Paleozoic schist.
The Mineral Resource at La Colosa currently stands at 392Mt at an average gold grade of 0.99g/t for contained gold of 12.4Moz. The deposit remains open in several directions and at depth. Current exploration activities seek to expand confidence in the resource extensions and obtain metallurgical test samples.
Growth prospects
AngloGold Ashanti secured the necessary permit authorisations from the national authorities to resume exploration activities in August 2010, thereby allowing resumption of the project prefeasibility study. This work will be conducted through to 2014/2015 when the feasibility study is expected to be finalised.
Surface mapping and sampling in the La Colosa region have continued to reveal strong mineral exploration opportunities with additional porphyry systems having been discovered. Given the potential to significantly increase the Mineral Resource at La Colosa and also to make additional discoveries in the broader region, La Colosa remains a leading growth project in the medium to long term for both AngloGold Ashanti and Colombia as a whole.
Outlook for 2011
The project is currently undergoing a prefeasibility study, which is expected to be concluded in 2013, during which time several key objectives are to be attained, namely: to close off Mineral Resource projections in order to better define the size of the project; to define higher grade Mineral Resources in order to advance gold production during early years of operation; to purchase remaining lands for project development and exploitation; to confirm mining and processing options as well as the facilities and infrastructure requirements and locations; to engage environmental and sustainability programmes; and to validate the project’s economic, social and environmental viability.
Greenfield exploration activities will also be initiated on several of the regional targets while this prefeasibility study is under way. If successful, expansion of the project could well occur, at which time the prefeasibility timeline may be reviewed.
Assuming no further changes to the scope of the project resulting from exploration, and that the prefeasibility is successful in all respects, a bankable feasibility study is planned for 2014/2015, followed by construction of the project once the economic viability of the project is established.
Expenditure of $70m has been budgeted for all activities scheduled for 2011.
Sustainability
Anglogold Ashanti engaged actively in the creation of the ‘Water Roundtable’ in Tolima to discuss and implement possible solutions to water management issues. In addition, the company has initiated several biodiversity campaigns in the region, with the support of non-governmental organisations, aimed at protecting certain species indigenous to the Tolima region.
Community
Community sentiment toward the project in Cajamarca province, where the project is located, improved during 2010 as the company worked to demonstrate the benefits of the undertaking and its ability to execute the development for the benefit of all stakeholders. Rice growers and environmental organisations in the region, however, continued to express concerns over the use and quality of the region’s water. AngloGold Ashanti will continue to provide information on its strategies for water management in order to address these concerns from one of the region’s most important constituencies. Multi-partite social programmes and projects accompany the exploration phase and are based on long-term sustainability considerations for the region, which include improvements in agricultural productivity, the elimination of sicknesses currently affecting cattle in the region and several educational programmes.
Environment
A monitoring programme, undertaken in conjunction with local universities, will accompany the exploration phase of the project and be designed to provide data on the potential impact of mining activities on the region’s flora, fauna and water resources. The company is working with Conservation International and a number of other NGOs to address biodiversity issues.
Continental Africa – Democratic Republic of the Congo
Kibali
Description
The Kibali Gold Project is a joint venture between AngloGold Ashanti and Randgold Resources, which together hold an effective 90% stake, with the remaining 10% held by OKIMO, the state-owned gold company of the Democratic Republic of the Congo (DRC). The project, operated by Randgold Resources, has the potential to become one of the world’s largest gold mines. Located in the northeast DRC, near the village of Doko, some 560km northeast of the city of Kisangani and 150km west of the Ugandan border, the project is currently undergoing an updated feasibility study, the results of which are expected in the second quarter of 2011.
The orebody is hosted within the Moto Greenstone Belt, which is comprised of the Archaean Kibalian volcano-sedimentary rock and ironstone chert horizons that have been metamorphosed to greenschist facies.
An updated Mineral Resource and Ore Reserve model has been completed for the main KCD (previously referred to as the Karagba, Chauffer and Durba orebody), Sessenge, Pakaka and Pamao orebodies, which represent 83% of the declared Mineral Resource and 93% of the declared Ore Reserve. A total Mineral Resource of 8.3Moz of gold exists between the planned open pit and underground operations.
Pre-construction activities are scheduled to commence in early 2011 with the establishment of civil engineering and construction teams, coupled with design and engineering of the metallurgical plant and mine infrastructure. Erection of the construction camp began in January 2011 and first gold production remains on schedule for 2014.
Growth prospects
An active greenfield exploration campaign is under way, including an extensive sampling campaign.
Outlook for 2011
During the course of 2011, main activities will include infrastructure development as well as establishment of the site for civil and construction teams to allow completion of bulk earthworks for mining, infrastructure and the metallurgical plant. In addition, long lead items will be ordered including mills, crushers and power generation equipment.
Expenditure of $42m (attributable) is anticipated for 2011.
Sustainability
Safety
No fatalities occurred during 2010.
Community
The project teams continue to engage extensively with the community and stakeholders. Several engineering projects that will benefit both the Kibali project and community were completed, including construction of a new road between Aru and the village of Doko, a key staging point for the project, reducing travel times from several days – particularly during rainy weather – to three hours.
Ongoing work with both the community and Okimo has led to cessation of illegal mining activities within a defined exclusion zone. Alternate work programmes have been introduced following extensive negotiations, to compensate for the resultant loss in income to the community.
Public participation engagements with the community continued throughout the year, focusing on critical issues including the relocation of some 3,700 dwellings from the defined exclusion zone. A memorandum of understanding, regarding relocation of the local church, was agreed with the Catholic Church.
Environment
A full environmental study is being undertaken as part of the ongoing updated feasibility study.
Mongbwalu
Description
The Mongbwalu project, currently undergoing a fast tracked feasibility study, is located within the 5,487km2 tenement package held by AngloGold Ashanti and its joint venture partner Okimo, the state-owned gold company of the DRC, which owns a 13.8% stake. The Mongbwalu licence areas are northwest of Lake Albert in the Ituri province of the north eastern DRC. The Archaean granites and greenstones of the Kilo Moto belt extend some 850km west-northwest of the lake. Ongoing feasibility work is focused on the former Adidi underground mine workings, close to the village of Mongbwalu. The study calls for a 60,000t a month underground operation producing approximately 120,000oz of gold a year when in full production.
An updated Mineral Resource of 1.90Moz was declared in 2010 following an infill-drilling campaign. A further Mineral Resource update is expected midway through 2011.
Data collection work undertaken during 2010 in support of the feasibility study included environmental, geotechnical, ground water and engineering information. The feasibility report is due for completion in the first quarter of 2011 and, subject to approval, first gold production is scheduled for late 2014.
Growth prospects
There is considerable opportunity for growth both in the vicinity of the current Mongbwalu feasibility study area and in the area covered by the greater Kilo Regional Exploration campaign. Drilling and trenching is now under way at the Mont Tsi project and at other sites in the concession area and will continue throughout 2011.
Drilling is continuing at the Mongbwalu feasibility study area to further upgrade and expand the Mineral Resource base.
The greater Kilo exploration project (including Mongbwalu) has the potential to form a major growth centre for the company and country in the coming years.
Outlook for 2011
The main activities planned in the Mongbwalu project area during 2011 include continued drilling and a preconstruction phase involving road development and other infrastructure projects. Planned operating costs for 2011, excluding greenfield exploration, are budgeted at $36m.
Sustainability
Safety
Tragically, a fatality occurred at the Mongbwalu camp in 2010 when an employee slipped and fell while working on a stationary bulldozer. Safety measures have been improved to prevent a recurrence of this accident and a dedicated safety manager is to be appointed in 2011.
A major upgrade of the camp electrical reticulation is scheduled for early 2011 in order to improve work and living conditions. An on-site clinic was established in 2010 and is manned by a senior nurse and paramedic. This clinic operates in conjunction with the local hospital and in consultation with the regional health authorities.
Community
The company has engaged stakeholders at all levels, from local communities to provincial and state entities, in order to ensure sustainable development in the area. Early planning work is also focusing on critical infrastructure to facilitate economic development in the region, including power generation and road construction.
A number of initiatives have been initiated in the local communities, including refurbishment of the Ecole Primaire 3 local school in Mongbwalu and the establishment of literacy and finance programmes under the auspices of the ‘Washa Washa’ community development programme.
Support has also been given to local vaccination campaigns and malaria prevention. These are to be expanded in the coming year.
A major study has been undertaken to understand the impact of any future mine development on the economic activity in the region. Consultative and information sharing forums are regularly held with the local community and include participation by artisanal and small-scale mining operators.
Environment
Environmental studies have been commissioned both as part of the feasibility study and also to determine broader regional biodiversity, water quality and land-use, which in many areas have been heavily impacted by previous formal and informal mining activity. An audit of existing disturbance to the environment is being compiled as part of the feasibility study.
Australasia – Australia
Tropicana
Description
The Tropicana Gold Project (TGP) is part of a joint venture between AngloGold Ashanti (70% interest and manager) and Independence Group (30%). The project is located 330km east-northeast of the mining service centre, Kalgoorlie, in Western Australia and 200km east of AngloGold Ashanti’s Sunrise Dam Gold Mine. The area is remote and infrastructure is limited.
The boards of AngloGold Ashanti and Independence approved development of the TGP in November 2010.
Tropicana was discovered in 2005 in an area not previously thought to be prospective for gold, and represents 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 tenements over the bulk of what is now recognised as a major new gold province, whilst ownership of the first processing plant in the Tropicana Belt will put the joint venture in a strong strategic position to leverage value from future discoveries.
The approved project will utilise conventional open-cut mining methods to mine the Tropicana and Havana deposits and conventional carbon-in-leach processing technology to process the ore at a rate of 5.8m tonnes per annum.
Besides the processing plant and mining area, project infrastructure will include 220km of new road, a water bore field, a sealed airstrip and an accommodation village.
Average annual gold production is anticipated to be 330,000oz to 350,000oz (100% project) over the life of the mine and 470,000oz to 490,000oz per annum over the first three years, when higher grade ore will be processed.
Total cash costs are expected to be A$710/oz–A$730/oz (real) over the life of the mine and A$580–A$600/oz over the first three years.
Growth prospects
A feasibility study is under way to determine the viability of open-cut mining of the Boston Shaker deposit, immediately north of the proposed Tropicana pit, following encouraging results from scoping studies. A prefeasibility study on underground mining of the Havana Deeps mineralisation beneath the proposed Havana pit, will commence in 2011.
Outlook for 2011
Extensive exploration will continue in 2011 given the studies being undertaken on the Boston Shaker and Havana Deeps prospects. Tendering of contracts, initially focused on infrastructure requirements, will begin in January 2011.
Construction will start in the June quarter of 2011 and will include construction of a new section of road, the airstrip and the accommodation village.
Sustainability
The processing plant has been designed to be energy and water efficient. The mine will utilise high pressure grinding rolls which use less energy than conventional ball or SAG milling. Leach and tailings thickeners will be used to recover and recycle process water, and grey water from the village will be recycled for use in the processing plant.
Community
The proposed project will provide employment in the local community and goods and services will be procured from local businesses wherever possible. Tropicana will also generate royalties and taxes for the state and federal governments.
Consultation with key community groups has been under way for several years. A full spectrum of stakeholder consultation commenced very early in 2008, well before the project was referred to the Western Australian Environmental Protection Agency later that year. The joint venture held several public meetings in Perth, Kalgoorlie and Menzies during the various phases of the approvals process to address community concerns on an ongoing basis. Regular meetings are also held through the joint venture's Indigenous Reference Group to keep members of the Aboriginal community informed about the development of the project, including heritage matters and employment and contracting opportunities when they arise.
Environment
Significant environmental baseline surveys were conducted between 2006 and 2009 to understand key environmental and heritage values. This information was used to design a project that avoids all known populations of Declared Rare Flora and Archaeological Heritage Sites and minimises impacts on priority and threatened flora and fauna habitats. The project was referred to the Western Australia Environmental Protection Authority and the Commonwealth government in the first half of 2008. The project underwent a public environmental impact assessment in the second half of 2009 and received state and Commonwealth approval towards the end of 2010.