AngloGold announces Phase One approval of Long Island strategy at Tropicana

AngloGold Ashanti Australia Ltd (AGAA) is pleased to announce that the partners in the Tropicana Joint Venture have approved Phase One of the Long Island strategy, increasing production from the mine in the medium term and extending mine life. Long Island has been driven by developing a more cost-effective way to mine waste. It involves using a strip-mining approach that minimises waste haulage distances by using in-pit backfill, rather than trucking the material long distances to surface waste dumps. The Tropicana Gold Mine, located 330 km east-northeast
of Kalgoorlie in Western Australia, is owned by AGAA (70% and manager) and Independence Group NL (30%).
Phase One of Long Island comprises mining of the Havana South pit and a cutback of the Boston Shaker pit, which utilises the completed Tropicana pit as the first backfill location. The full Long Island strategy adds 2.1 Moz to Tropic
ana’s business plan, extending mine life by approximately seven years to 2027. The project value has been enhanced by the decision to install a 6 MW ball mill in the processing plant, enabling throughput to be matched to the increased mining rate and improving gold recovery by 3% to approximately 92%.
Grade streaming, which prioritises the processing of higher-grade ore and stockpiling lower-grade material for processing at a later date, has resumed at Tropicana and will continue through 2018 and 2019. Gold production (100%) is forecast to be between 478,000 oz and 492,000 oz next year and between 530,000-548,000oz in 2019. “This project is in line with our approach of developing cost-effective brownfield projects with attractive payback periods that extend life and improve margins,” said Michael Erickson, AngloGold Ashanti’s Senior Vice President Australia. “The project validates the innovative ideas developed by our site team and technical specialists, and also gives us an excellent base from which we can investigate adding additional value through underground mining opportunities and regional exploration.”
Gold production over Tropicana’s remaining life of mine is now forecast to be about 4Moz. This does not include potential future underground production from mineralisation at the Boston Shaker ore body, which remains open at depth. A pre-feasibility study on underground mining will be commissioned in 2018.
The Long Island strategy is underpinned by continued exploration success, evidenced by another increase in the Ore Reserve to 66.59 Mt grading 1.91 g/t for a total of 4.08 Moz. This represents an increase of 280,000 oz over the past year, even after depletion of about 550,000 oz is taken into account. Including gold produced to date, Tropicana has delivered a 72% increase in Ore Reserves since the Tropicana project was approved in November 2010.
As part of the cost-effective strip mining approach, waste haulage distances are reduced by using in-pit backfill. After initially considering mining a starter pit at Havana South to act as a void for waste in the proposed pit cutbacks, it became apparent from drilling that because there was limited upside beneath the Tropicana pit, it would provide significant value as a backfill location. As previously reported, the Long Island concept provides optionality and flexibility, with eight mining stages and three decision points giving the opportunity to adjust to changing economic
conditions. If all three phases are implemented mine life will be extended to 2027.
Mining rates at Tropicana have been successfully increased over the past year to more than 90 Mt/y with the addition last year of a 600 t Cat 6060 face shovel, de-risk ing the increase to the Long Island mining rate of between 95-107 Mt/y. The mining rate will peak at 107 Mt/y in 2019 and continue at that rate for about four years until the bulk of the Havana pit is mined. To achieve the additional material movement increase, a second Cat 6060 600 t shovel with up to five additional Caterpillar 793 trucks and supporting ancillary equipment, will be added to the fleet. The capital expenditure related to Long Island will be approximately A$18 million, primarily for expansion to the accommodation camp and heavy vehicle workshop infrastructure. The additional fleet will be provided by Macmahon Holdings as part of the mining contract at the site. Productivity improvements through AGA’s Operational Excellence programme have resulted in a reduction in mining costs at Tropicana over the past two years
to A$3.07/t using conventional mining methods. It is anticipated that ongoing mining efficiencies will further reduce mining costs by 5-10% during Phase One.