AngloGold sees q1 '13 for Tropicana gold mine starting
AngloGold Ashanti Ltd says mining could commence at its Tropicana gold project in Western Australia by 2013, provided all further studies and approvals are positive.
The deposit is widely accepted as among the nation's most significant gold discoveries this decade.
AngloGold Ashanti Australia Ltd and joint venture partner Independence Group NL, a nickel miner, have approved the commencement of a feasibility study at Tropicana, 330km north-east of Kalgoorlie.
This follows positive outcomes from a long-awaited pre-feasibility study (PFS), which was based on a 75.3 million tonne resource grading 2.07 grams per tonne gold and containing 5.01 million ounces of the precious metal.
"The TGP (Tropicana gold project) is expected to produce an average of between 330,000 ounces to 410,000 ounces per annum over its life, which is currently estimated to be 10 years," AngloGold said in a statement on Monday.
"There is potential to increase resources and mine life through additional drilling at Havana South and other prospects."
AngloGold Ashanti vice-president Australia, Mike Erickson, said he expected the feasibility study would be completed by mid-2010, when the joint venture would decide whether to proceed with the development, provided regulatory approvals had been received.
Development would take about two years and commissioning would begin in the first quarter of 2013, Erickson said.
"Tropicana is an important growth project for AngloGold Ashanti, and if development goes ahead it will make a significant economic contribution to eastern Goldfields and Western Australia," he said.
The capital cost of plant and infrastructure, excluding mining fleet capital, is estimated to be about $520 million.
"Expenditure during the two-quarter commissioning period is likely to be substantially offset by gold production during the same period," South Africa-headquartered AngloGold said.
Independence managing director Chris Bonwick described Tropicana in March as "probably the most significant Australian gold discovery in over a decade".
Bonwick said the project area was a "new Australian gold camp" that could yield multiple mines through ongoing exploration.
Eagle Research Advisory managing director Keith Goode said Tropicana was "definitely" the start of a new major gold province.
"You've got a 260km gold belt that hasn't been mined due to remoteness - that's why it hasn't happened until now," Goode told reporters.
Tropicana was likely to become an underground operation after being initially mined from an open pit, he said.
"It was envisaged to have one plant, then another plant further down along the trend, so I think it is just a case of getting this one up and running,and then spreading from there," he said.
The PFS had taken longer than expected but this was unsurprising given AngloGold had to consider power and infrastructure solutions for the remote project, he said.
AngloGold's sale of its minority interest in the Boddington mine in WA to US-based gold mining giant Newmont Mining Corporation for about $US1.1 billion ($A1.33 billion) earlier this year was wise because it allowed AngloGold to focus on Tropicana, Goode said.
It would have taken "too much cap ex to do both", he said.
"It was the logical thing for them to do."
Newmont started production at Boddington on Thursday, slightly behind schedule.
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