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IGO LIMITED — Capital/Financing Update 2009
Jul 26, 2009
65111_rns_2009-07-26_d1b32314-0433-4e68-8745-da20264447ed.pdf
Capital/Financing Update
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AngloGold Ashanti Limited \ (Incorporated in the Republic of South Africa) (Reg. No.1944/017354/06) \ ISIN Number: ZAE000043485 \ NYSE symbol: AU \ JSE share code: ANG
Corporate Affairs Department: \ 3rd Floor \ 76 Jeppe Street \ Johannesburg \ 2001 \ South Africa Tel +27 (0)11 637 6317 \ Fax +27 (0)11 637 6399/6400 \ www.AngloGoldAshanti.com
news release
27 July 2009
Tropicana Feasibility Study approved
AngloGold Ashanti Australia Ltd and its joint venture partner Independence Group NL have approved the commencement of a Feasibility Study at the Tropicana Gold Project in Western Australia.
AngloGold Ashanti Australia is manager of the Tropicana Gold Project (TGP), with a 70% interest, and Independence has the remaining 30%. The TGP is part of the Tropicana Joint Venture and is located 330 kilometres north-east of Kalgoorlie.
The decision to commit to Feasibility Studies follows the positive outcome of a detailed Prefeasibility Study (PFS) carried out over the past 12 months. The PFS was based on a Measured, Indicated and Inferred Mineral Resource of 75.3 million tonnes grading 2.07 grams/tonne for 5.01 million ounces.
The PFS considered a wide range of project options and defined a preferred project with the following specifications:
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- Open pit mining of the Tropicana and Havana deposits via a conventional drill and blast, truck and excavator operation;
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- Ore processing at a rate of 6 million tonnes per annum, based on a comminution circuit comprising two stage crushing, high pressure grinding rolls and ball milling, along with a conventional CIL circuit;
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- A flexible approach to pit design to accommodate future price fluctuations based on a planning reserve of 56 million tonnes grading 2.0 grams/tonne for 3.6 million ounces of gold
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- Development of considerable supporting infrastructure, including construction of 220 kilometres of new road, power infrastructure and communications capacity.
The key development issues to be addressed in the Feasibility Study are owner versus contract mining, and diesel versus gas power, using a third party Power Purchase Agreement. The Feasibility Study will also focus on mine and resource development options to optimise project economics.
The TGP is expected to produce an average of between 330,000-410,000 ounces per annum over its life, which is currently estimated to be 10 years. There is potential to increase resources, and mine life, through additional drilling at Havana South and other prospects.
Cash costs, which will depend on the mining and treatment options chosen, and gold and oil prices, are expected to be between A$590/oz and A$710/oz*.
The capital cost of plant and infrastructure, excluding mining fleet capital, is estimated to be approximately A$520 million (2008 dollars, constant). Expenditure during the two quarter commissioning period is likely to be substantially offset by gold production during the same period.
- Based on current prices: gold US$950/oz; AUD:USD 0.8; Oil Price US$70/bbl
AngloGold Ashanti Vice President Australia, Mike Erickson, said he expected the Feasibility Study to be completed by mid-2010, at which time, provided regulatory approvals had been received, the joint venture partners would consider a decision to begin development.
Erickson said if approved at this time, development would take about two years and commissioning would begin in the first quarter of 2013.
“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.”
A draft Public Environmental Review (PER) document is currently being considered by the WA State Government. The PER document is expected to be released for an eight week public review period in the September 2009 Quarter. It is anticipated the required approvals will be obtained by mid-2010.
All Mining Licences and Miscellaneous Licences necessary to enable the project to proceed have been granted. A comprehensive consultation programme with key stakeholders is continuing.
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| Contacts | |||
|---|---|---|---|
| Tel: | Mobile: | E-mail: | |
| Andrea Maxey (Media & Investors) | +61 (0) 8 9425 4603 | +61 (0) 400 072 199 | [email protected] |
| Sicelo Ntuli (Investors) | +27 (0) 11 637 6339 | +27 (0) 71 608 0991 | [email protected] |
| Stewart Bailey (Investors) | +1 212 836 4303 | +1 646 717 3978 | [email protected] |
| Alan Fine (Media) | +27 (0) 11 637 6383 | +27 (0) 83 250 0757 | [email protected] |
| Joanne Jones (Media) | +27 (0) 11 637- 6813 | +27 (0) 82 896 0306 | [email protected] |
Certain statements made in this communication, including, without limitation, those concerning AngloGold Ashanti’s strategy t o reduce its gold hedging position including the extent and effects of the reduction, the economic outlook for the gold mining indu stry, expectations regarding gold prices, production, cash costs and other operating results, growth prospects and outlook of AngloGold Ashanti’ s operations, individually or in the aggregate, including the completion and commencement of commercial operatio ns of certain of AngloGold Ashanti’s exploration and production projects and completion of acquisitions and dispositions, AngloGold Ashanti’s liquidity and capita l resources, and expenditure and the outcome and consequences of any pending litigation procee dings, contain certain forward-looking statements regarding AngloGold Ashanti’s operations, economic performance and financial condition. Although AngloGold Ashanti believes that the ex pectations reflected in such forward-looking statements 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 and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in gold prices and exchange rates, and business and operational risk management. For a discu ssion of such factors, refer to AngloGold Ashanti's annual report for the year ended 31 December 2008, which was distributed to shareholders on 27 March 2009 and the company’s annual report on Form 20-F, filed with the Securities and Exchange Commission in the United States on May 5, 2009 as amended on May 6, 2009. AngloGold Ashanti undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today’s date or to reflect the occurrence of unanticipated eve nts. 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.
AngloGold Ashanti posts information that is important to investors on t he main page of its website at www.anglgoldashanti.com and under the “Investors” tab on the main page. This information is updated regularly. Investors should visit this website to obtain important information about AngloGold Ashanti.
The information in this report that relates to Mineral Resources is based on information compiled by Mark Kent, who is a full -time employee of AngloGold Ashanti Limited, and a member of the AusIMM. Mark Kent has sufficient expe rience relative to the type and style of mineral deposit under consideration and to the activity which has been undertaken, to qualify as a Competent Person (or Recognised Mi ning Professional) as defined in the 2004 Edition of the JORC Code. Mark Kent cons ents to the release of this resource based on the information in the form and context in which it appears.