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The expansion will boost annual production to 250,000 oz. (from the current 190,000 oz.) at a cost of US$169 per oz. over the life of the mine, which will be extended by six years to 2019.
The mine will be deepened to allow access to the Serrotinho and Fonte Grande orebodies; these are below the existing mine workings, which account for 60% of the mineral resource.
Also, workers will extend the ramp from level 11 to level 21, the deepest point at which surface drilling has intersected the main orebodies.
To accommodate the increase in production, AngloGold Ashanti will upgrade the main shaft’s hoisting capacity and build new milling and flotation facilities at surface.
Flotation concentrate will be transported via an existing, 16-km aerial rope-way to a treatment plant at Queiroz, where another roaster and acid plant will be built and the current leaching facilities upgraded. The existing milling and flotation facilities at Queiroz will be decommissioned.
The deepening project is already under way, and AngloGold expects to commission the expansion in December 2006, then ramp up to full production by mid-2007.
The company is optimistic the project will enable it to exploit narrow-vein orebodies both below level 11 at Cuiab and at the Lamego high-grade gold deposit, nearby. Conceptual studies indicate there is “potential to extract significant value from these areas.”
Drilling at Lamego has confirmed multiple mineralized horizons at the southern extremity of the Cabea da Pedra fold hinge, and the Carruagem exploration ramp was extended another 227 metres during the fourth quarter to 242 metres.
Commenting on the Cuiab expansion, AngloGold Ashanti CEO Bobby Godsell said: “This decision confirms the view that Cuiab is a world-class, long-life mine and is consistent with our value-adding strategy of growing the company through discovering or acquiring new assets or expanding existing operations.”
The major’s subsidiary AngloGold Ashanti Brasil, which includes not only Cuiab but the Crrego do Stio heap-leach mine, produced 240,000 oz. gold in 2004 at a total production cost of US$191 per oz., compared with 228,000 oz. at US$199 per oz. in 2003. Operating profits between the two periods rose to US$45 million on gold income of US$87 million from US$37 million on income of US$80 million.
Exploration drilling at the Carvoaria Velha-Bocaina zone, part of Crrego do Stio, confirmed the presence of multiple, narrow, locally high-grade horizons of sulphide mineralization. Drilling has also extended the known oxide resource to the north and confirmed the down-plunge continuity of sulphides.
Ongoing underground drilling at the nearby Cachorro Bravo zone continues to intersect high-grade mineralization in the 300 horizon.
AngloGold Ashanti also has a half-interest in the Serro Grande operations in central Brazil, from which it produced an attributable 94,000 oz. gold at a production cost of US$178 per oz. in 2004, compared with 95,000 oz. at US$163 per oz. in the previous year.
Company-wide, AngloGold Ashanti produced 6.05 million oz. gold at a cash cost of US$268 per oz. in 2004. The 8% increase from 2003 is chiefly due to the merger of AngloGold with Ashanti Goldfields.
Although Brazil represents only 4% of AngloGold Ashanti’s global asset base of US$8.2 billion and 5.5% of its gold production in 2004, the country accounts for 14% of its US$787-million operating profit.
Overall, AngloGold’s year was dominated by the comprehensive restructuring of the company’s hedge book and the relative underperformance of the large Obuasi underground gold mine in Ghana, formerly the flagship operation of Ashanti Goldfields.
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