Tag Archives: AngloGold Ashanti

AngloGold, IGO eye Tropicana production flexibility as Boston Shaker goes commercial

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AngloGold Ashanti, in conjunction with its joint venture partner IGO Ltd, has declared commercial production at the Boston Shaker underground mine at its Tropicana gold operation in Western Australia.

Situated some 330 km east-northeast of Kalgoorlie, the operation is managed by AngloGold Ashanti Australia (AGAA) with a 70% interest, while IGO holds the remaining 30% interest.

Development of the Boston Shaker mine was approved in March 2019, and the mine transitioned into commercial production this month on schedule, below the A$105.7 million ($77 million) budget and, importantly, with no recordable safety incidents, AngloGold said.

Boston Shaker will deliver around 1.1 Mt/y of ore at an estimated grade of 3.5 g/t, contributing some 100,000 oz/y to gold production over a seven-year mine life.

“Underground mining at Boston Shaker will leverage further value from this high performing operation, achieving payback in just over three years with upside potential as the deposit remains open at depth,” AngloGold Ashanti SVP Australia, Michael Erickson, said. “The underground mine will contribute higher-grade mill feed from the current quarter onwards, improving the gold production profile and enhancing cash flow during calendar 2021-2023 when the mine plan includes periods of higher waste stripping in the Havana open pit.”

AngloGold has previously said operational excellence work at the underground mine is focused on remote bogging, the mechanical operator-controlled digging of ore from surface, and on optimising level spacing and extraction ratios.

The first production stope was fired in June 2020 and underground ore production has now reached an annualised production rate of 700,000 t/y with the design production rate expected to be achieved in March 2021.The commercial production milestone at Boston Shaker comes after Tropicana produced its 3 millionth ounce of gold in March this year, just seven years after pouring first gold in September 2013.

AngloGold explained: “From commencement of the operation at Tropicana the mining strategy has been designed to optimise cash flow, net present value and the delivery of ore. The Tropicana, Havana, Havana South and Boston Shaker open pits have been mined as a series of cutbacks, sequenced and scheduled to maximise value at a mining rate that delivers the best mining unit cost for the scale of the operation.”

Up until June 2020, ore production from the open pits exceeded the plant capacity, allowing higher-grade ore to be preferentially treated, while lower grade ore was accumulated on stockpiles. Over the course of the second half of 2019 and first half of 2020, the Tropicana pit and Havana pit were completed, in line with the mine plan. As a result, grade streaming came to an end and stockpiled ore is currently being used to supplement the mill feed from the Havana South and Boston Shaker pits.

A decision was made in the June 2020 quarter to invest in the next cutback of the Havana pit (Stage 2) which will allow access to the deeper Havana open-pit ore from 2022 onwards. While this cutback is being completed, mill feed will be sourced from the Boston Shaker open pit, supplemented by some 4 Mt/y of low grade (0.85-1.05 g/t) stockpiled ore, resulting in a lower milled grade over the period. The lower grade will be partially offset by the Boston Shaker underground mine, which is ramping up and will be contributing at full capacity by the second half of 2021.

The plan remains for gold production (at 100%) in 2020 and 2021 to be between 400,000-450,000 oz, compared with 513,785 oz last year. From 2022 onwards, annual gold production will normalise between 450,000-500,000 oz as the low-grade stockpile ore in the mill feed is displaced by a larger proportion of Boston Shaker underground ore and an increasing contribution of higher-grade ore from the Havana pit, as the cutback progresses.

AngloGold says significant potential remains to unlock known extensions of mineralisation beneath the Tropicana and Havana open pits and the extensions at depth of the Boston Shaker Underground. Development of an underground drill drive from the Boston Shaker Decline is well advanced with a total of 240 m completed to date. The drill drive is well positioned to also provide production access to the Tropicana underground reserve should the drilling prove successful. Underground diamond drilling is scheduled for the December 2020 quarter with a decision to mine expected during 2021.

Final trade-off studies are currently being completed on the Havana Stage 3 open pit cut-back and Havana underground to determine the optimal open pit – underground interface. A decision on the way forward for Havana Stage 3 is expected to be made during 2021.

(photo credit: Macmahon)

Macmahon, Flanders help automate Cat drills at Tropicana gold mine

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The rollout of a A$6 million ($4.3 million) autonomous drill fleet at the Tropicana gold mine in Western Australia is believed to be an industry first for hard-rock mining, according to the mine’s contractor, Macmahon Holdings.

Macmahon says the use of hammer drilling versus the more traditional rotary concept when it comes to blasthole drilling is unique in the hard-rock space.

AngloGold Ashanti Australia (AGAA), with support from Flanders, a technology innovator and leader in autonomous drilling, and Tropicana Mining Alliance partner, Macmahon Holdings, now has five autonomous CAT MD6250 drill rigs and seven manned rigs as part of its drilling fleet.

Mining at Tropicana, which is 70% owned and managed by AngloGold Ashanti Australia and 30% by IGO, is carried out by Macmahon.

The fit out of the fifth rig in August comes only four months after the first rig was commissioned on April 27 and incorporates the ARDVARC drill control system with multi pass and down-the-hole modes to provide seamless operations with the site’s recently-installed long term evolution (LTE) telecommunications network, Macmahon said.

The project was initiated by AGAA Manager: Technology, Martin Boulton, who developed the original project scope before engaging Macmahon to further develop the business case.

He has been integral in developing the roll out schedule and managing the various technical linkages such as running the solution on the Tropicana LTE platform, according to Macmahon. This work led to the project taking out the AngloGold Ashanti Zero HARM (Hazard & Risk Management) Award in 2020.

“The autonomous drill fleet roll out has had many benefits with increased operating efficiency and asset utilisation as the equipment can operate through lightning and inclement weather, explosive detonation and eliminates the need for operator fatigue breaks,” Boulton said.

It also introduces a safer, risk-reduced method in production drilling, increases asset availability and operating efficiency and decreases asset wear, according to Macmahon.

While still early days, the autonomous fleet has already recorded an 8% increase in instantaneous penetration rates compared with the manned rigs, along with a 14% reduction in delay times in June compared with May.

These improvements can be attributed to the rigs’ ability to continue to drill safely during live blasts and lightning storm, while delays have also been removed from water refills and shift changes, the company said.

Tropicana Autonomous Drilling Systems Specialist, Richard Hill, said the autonomous project was testament to the team on site and at Flanders, and had come a long way in a relatively short period of time.

One person (drill controller) can operate up to five rigs from the one console located in the administration building at Tropicana with the automated rigs supported by two ground crew on the pit floor. To date, up to three rigs have been operated from the one console.

With roster changes on a two weeks on and one week off swing, that equates to three crews (with one back-up per crew).

“The plan is to have six drill controllers when fully mobilised, one main controller and a backup per crew,” Hill said.

However, like any new concept, it was not without some early teething problems.

The first was rod feed rates, particularly when it came to transitional ground, but the solution came with development of a new bit chasing logic and the plan is to also develop an automated bit changer that would further reduce delay times, Macmahon said.

Another challenge was managing the autonomous operating zones, which are currently required to run separately from the manned rigs as they were not equipped with collision avoidance software.

“We are working on that now and within the next couple of weeks should be able to incorporate those in the collision avoidance, and that will then increase our production as we will not have to change work areas as often,” Hill said.

Manning has also been an issue in terms of availability of ground crews to support the drill controller, but the role will now be classified as an entry-level position with a clear career pathway progression for new entrants.

Macmahon General Manager Plant & Maintenance, Mark Hatfield, said the company was thrilled with the overall performance of the fleet having achieved full conversion from design to installation and commissioning of the drill and remote operation centre in just eight weeks.

“The Flanders team have worked alongside our people providing specialist support for the duration of the trial on site, and remotely, and will work to provide continuous improvements in the coming months,” he said.

“The system provides an agnostic solution with a customisable capability, with all available drill data providing valuable insights for analysis and improved planning, and importantly, improving site safety conditions for our people.”

MacLean Engineering up to the Africa mining challenge

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MacLean Engineering’s investment in Africa is paying off, with multiple production support vehicle sales recently secured on the back of an increased presence in South Africa.

Having last month bolstered its largest single fleet in Africa to 11 vehicles at the Kibali gold mine, in the Democratic Republic of Congo, the company is now busy assembling equipment for delivery at an underground mine in Namibia, while making manufacturing and delivery plans for a successful tender for five units that will head to a underground gold mine in Mali.

John-Paul Theunissen, MacLean’s General Manager for Africa, says recent sales could be put down to the company boosting its manufacturing and service capacity on the continent close to two years ago.

“We are now manufacturing for Africa out of South Africa,” he told IM. “Towards the end of 2018/beginning of 2019, we commissioned another 900 sq.m of manufacturing space at our South Africa facility. This means we now have 1,000 sq.m of workshop and assembly space.”

The Free State facility, the first international branch MacLean set up back in the 1990s, also offers maintenance and service support.

These attributes, plus the ability to access MacLean engineers across the globe for equipment troubleshooting, have allowed Africa-based mining companies to get comfortable with the Canada-based brand, according to Theunissen.

“We have really started to build momentum in Africa, increasing the level of service and support closer to home,” he said.

“It is this local aspect that really sells fleets, as opposed to individual machines.”

MacLean now has 1,000 sq.m of workshop and assembly space, Theunissen says

This increased local offering has arrived at just the right time.

While the stricter lockdown measures in South Africa have been lifted – the country has moved from Level 5 to Level 3, allowing mines to return to full capacity (with COVID-safe procedures in place) – companies procuring equipment for Africa are conscious intercontinental deliveries could face upheaval again if a ‘second wave’ of COVID-19 hits.

Some mining companies influenced by recent lockdowns are also making longer-term pledges to adjust their supply chains to take advantage of local expertise, at the same time reducing potential risks that come with buying machines and solutions from overseas suppliers.

This recently enlarged presence in Africa could see MacLean benefit from such moves.

Recent orders

The latest orders Theunissen mentioned could reflect this reality.

In securing a contract to supply three MacLean 3-Series Cassette Trucks (CS3) and four cassettes to the Murray & Roberts Cementation and Lewcor Mining joint venture set to establish the underground stoping horizon at the Wolfshag zone at B2Gold’s Otjikoto mine, in Namibia, the company achieved several ‘firsts’, he said.

“It’s a new customer, Murray & Roberts; a new country, Namibia; and a new miner, B2Gold,” he said.

These units will be assembled in South Africa – another MacLean first – and are due to be delivered to the mine by the end of the last quarter of the year, according to Theunissen.

And, as mentioned before, the company recently bolstered the fleet at the Barrick Gold/AngloGold Ashanti majority owned Kibali gold mine in the DRC.

The latest piece of equipment for the mine – which arrived at the end of July – was one of the company’s personnel carriers.

This adds to the three EC3 Emulsion Chargers, a WS3 Water Sprayer, a FL3 Fuel Lube Truck, and a BT3 Boom Truck – all from MacLean’s trusted Mine-Mate™ Series – that Byrnecut, the original mining contractor at Kibali, brought in from 2013 onwards.

When the Kibali mining model changed to ‘owner-operator’ under the management of Randgold (now Barrick), the fleet got bigger, with the miner adding four new rigs: another EC3, another BT3, an SL3 Scissor Lift with pipe handler attachment, and a TM2 Mobile Concrete Mixer.

MacLean says its expanding presence at Kibali, from the development phase all the way back in 2013 up to achieving record production numbers in 2019 and 2020, illustrates the “MacLean Advantage in action”.

It explained: “MacLean’s dedicated team in South Africa has worked closely with mine management and operators to provide the training, maintenance and support needed to keep Kibali running smoothly. With operations forecast to continue at Kibali through 2036, MacLean looks forward to providing dependable support for years to come.”

Tech take-up

Mines like Kibali – one of the most technologically advanced in Africa – are gradually becoming more and more automated in an effort to increase productivity and safety.

Already one of the world’s most highly automated underground gold mines, Kibali’s backbone is Sandvik’s AutoMine Multi Fleet system, supervised on surface by a single operator. This system, in a world first, allows a fleet of up to five LHDs to be operated autonomously, 750 m below the surface, within the same 6 m x 6 m production drive while using designated passing bays to maintain traffic flow, Barrick says. A similar system is used in the production levels to feed the ore passes, according to the company.

While MacLean’s production support vehicles often interact with these autonomous loaders, for the time being they are still manned by operators.

This is set to change into the future, according to Theunissen.

“The Advanced Vehicle Technology Team (AVT) in Canada is moving into the automation space,” he said. “We’re looking to integrate our own digitalised systems into those of OEMs such as Sandvik and Epiroc to ensure fully interoperable autonomous operation.”

Within the AVT, the Advanced Vehicle Technology group embedded at the MacLean Research and Demonstration Facility, in Sudbury, Ontario (pictured below), has over 20 engineering staff working on remotely controlled to fully autonomous vehicle operation, using radar, LiDAR, and vehicle monitoring technology, according to MacLean.

This team has already come up with vehicle telemetry hardware and software, and virtual reality training tools. It is also transitioning to a cloud-based platform for documentation, parts ordering, and training content called Documoto.

The Advanced Vehicle Technology group is embedded at the MacLean Research and Demonstration Facility, in Sudbury, Ontario (photo: James Hodgins)

While these technology developments will, in the future, underwrite the company’s transition to offering machines capable of fully autonomous operation, MacLean is already at the front of the pack when it comes to facilitating the industry’s electrification movement.

In Canada, it has more than 30 battery electric mining vehicles (BEVs) working underground – at 10 mine sites, across four provinces, with more than 50,000 operating hours amassed.

While Africa as a whole might not yet have the energy infrastructure in place to fully leverage these ‘green’ BEVs – many mines remain off grid and reliant on diesel power – Theunissen has seen grid-connected miners in South Africa show interest in taking on these machines.

“In South Africa there is already appetite for BEVs,” he said. “We see it coming through in the RFIs (request for information) we get on projects.”

MacLean has an advantage over some of its competitors when it comes to converting these RFIs into sales.

Not only has it got thousands of operating hours under its belt, it also has engineers in place that can calculate the total cost of ownership savings a specific mine will achieve should they bring BEVs into their fleets. Due to the increase in upfront cost currently seen when comparing diesel- with battery-powered vehicles, this type of analysis is crucial to securing orders.

“We can show them how the machine will fit into the mining cycle and provide in-house calculations on ventilation and mine design savings,” Theunissen said. “This helps assist end users when it comes to long-term decision making for the mine.”

For countries in Africa to get on board the electrification train like those mines in Canada have, Theunissen thinks governments will need to introduce incentives for mines to change their energy inputs and adopt BEVs.

Should this happen, MacLean will be equipped both within the continent and internationally to take on that challenge.

Plotlogic raises profile and funds with BHP Iron Ore contract

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Australia-based Plotlogic and its artificial intelligence-based ore-characterisation technology has won admirers from both venture capital funds and the world’s biggest miner by market capitalisation.

The company announced this week that four of the world’s top artificial intelligence (AI) focused venture capital funds – Baidu Ventures, DCVC, 8VC, and Grids Capital – had invested in an over-subscribed angel round of funding for the company.

On top of this, Plotlogic confirmed it had signed its first contract to embed OreSense, its new AI ore characterisation technology, into an iron ore mine site of BHP’s in the Pilbara of Western Australia. This technology uses hyperspectral analysis and AI to optimise ore recovery on mine sites.

Plotlogic’s vision is to enable autonomous mining operations using precise grade control with its new AI ore-characterisation technology, bringing technology that can “see and grade ore” to optimise operations and maximise yield, it said.

“Plotlogic uses AI, computer vision and spectral analysis in real time to optimise the recovery of ore from mine sites,” the company said. “Accurate ore intelligence enables precision mining that lowers operating costs, minimises energy consumption and reduces operational uncertainty.”

Precision mining with the help of technologies like OreSense have the potential to increase worldwide industry value by $370 billion/y, according to Plotlogic, while reducing carbon emissions and improving the sustainability of mines over their life cycle.

Founder and CEO, Andrew Job, said: “The mining industry is years behind other industries in utilising big data and AI: as a result, there is a lack of fast and accurate orebody knowledge that ultimately restricts yield. With our technology we can grade every tonne of ore accurately, before it even leaves the ground – driving efficiency, sustainability, and profitability. Plotlogic can optimise the mining process from pit-to-port with pinpoint precision.”

The team behind the technology, in addition to mining engineer Job, include Dr Richard Murphy, one of the world’s leading experts in hyperspectral geology, and Dr Michael Edgar, an experienced physicist and expert in optical sensors with experience spanning NASA and CalTech. Plotlogic has more than doubled its workforce since the start of the year, plans to double again before the end of the year, and once again next year, the company said.

Plotlogic said research collaborations with the University of Queensland’s Smart Machines Group and the Mineral Research Institute of Western Australia aided its quick establishment as a leader in real time high precision ore mapping and modelling.

Job said successful field trials with BHP’s iron ore and coal divisions, AngloGold Ashanti and Citic Pacific Mining over the past three years had provided valuable learnings that improved the technology and value proposition of OreSense across the iron ore, gold and coal sectors.

“Our technology has been purpose designed and built from the ground to best meet industry requirements,” he said.

On the BHP Iron Ore contract, Job said: “The opportunity to partner with the world’s biggest mining company is instrumental to our collaborative approach in the development and implementation of new technology for the mining industry.”

K2Fly wins RCubed contract extension with AngloGold Ashanti

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K2fly is to keep running the reserve and resource numbers for AngloGold Ashanti after the Johannesburg-based gold miner signed up for another three years of the RCubed Resource Governance solution.

AGA, the third largest gold mining company in the world measured by production, was pivotal in the development of RCubed, according to K2Fly, with the gold miner’s New York listing being the inspiration behind the product.

Nic Pollock, K2fly Chief Commercial Officer, said: “AngloGold Ashanti was instrumental in the creation of the RCubed solution and is one of the few global mining companies that delivers a dedicated mineral resources and ore reserves report. The report is created entirely from within the RCubed Resource Governance solution, from data collection through to publishing ensuring full resource governance, security and the integrity of the data.”

RCubed software, K2fly says, generates resource and reserve reports that support reporting codes such as JORC, NI-43-101 and SAMREC across the major stock exchanges – including NYSE, LSE, TSX, ASX and JSE. It assists mining and resource companies in complying with their regulatory reporting obligations, according to the company.

The gold sector is performing extremely well for K2fly and RCubed sales with four of the top 10 global gold mining companies now using or implementing RCubed to report their resources and ore reserves, the company said. Only last week, the company signed up Newmont as a new RCubed customer.

K2fly’s total contract value for its own software solutions (RCubed and Infoscope) has risen by a further 41% in the March quarter to more than A$4.7 million as the contract terms extend, the company said. “This trend is expected to continue with further multi-year contractual negotiations in the pipeline.”

Kibali automation journey to be discussed at SME Conference

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One of the most autonomous underground mines in the world, Barrick Gold’s Kibali operation in the Democratic Republic of the Congo (DRC) recently hit another annual production record.

The mine soared past its 2019 production guidance of 750,000 oz of gold, with 814,027 oz being delivered. This topped the previous 2018 record of 807,251 oz.

At this year’s SME MineXchange Annual Conference & Expo, in Phoenix, Arizona, on February 26, Ismali Traore, Kibali Technical Services Manager, is to reveal more about how the operation has continued to surpass expectations and how safety has become front and centre at the mine, owned 45% by Barrick, 45% by AngloGold Ashanti and 10% by SOKIMO.

In his conference abstract, Traore said, in recent years, the mine has made significant progress by implementing a fully automated production level and material handling system (MHS) at the underground mine.

This sees up to three LHDs operated simultaneously from ore passes to the crusher and multiple LHDs from the stope to the finger raises. The entire automation system is remotely operated from a control room located on surface.

In a recent presentation, the Kibali partners said the system was designed to have autonomous Sandvik LH621 LHDs work in combination with a Sanvdik AutoMine loading system (ALS). The ALS Mission Control System is incorporated with features such as traffic management, auto-loading and tipping with real time tonne-kilometres/h, and a real-time bucket weighing system that is within 3% accuracy level for each bucket trammed to the coarse ore bins (COB) at the operation.

The MHS, meanwhile, uses data obtained from the ALS to interface with SCADA via an OPC interface, according to the partners. COB levels from the SCADA system are then interfaced with ALS to manage the loading of the bins.

All information is interfaced to achieve the nameplate capacity of the hoisting system – which WorleyParsons provided the operating philosophy for and Winder Controls (member of the SIEMAG TECBERG Group) provided the winder design for – while taking into consideration the availability of the ALS to equate the total MHS availability, they said.

In its objective of becoming one of the most efficient Tier One mines globally where safety is a focal point of the operation, a significant amount of time was spent on the traffic management and human interaction with the autonomous mining equipment, Traore said.

This is something Barrick President and Chief Executive, Mark Bristow, picked up on last month, saying the mine is continuing its technological advance with the introduction of truck and drill training simulators and the integration of systems for personnel safety tracking and ventilation demand control.

Traore is to expand on the important safety protocols implemented to mitigate the risk of collision between this equipment and humans within the automated system during his presentation.

Obuasi gold mine becomes ‘modern, mechanised mining operation’

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The renowned Obuasi gold mine, in Ghana, is back in action with AngloGold Ashanti confirming the redeveloped asset has poured first gold, five years since mining activities were suspended.

This achievement signals the successful redevelopment of the mine into a “modern, mechanised mining operation”, the company said.

The Obuasi Redevelopment project, which seeks to access Obuasi’s 30 Moz orebody over the next two decades and beyond, has completed the first phase of construction on time and on budget. Refurbishment of an existing plant and construction of new infrastructure and underground development, in line with a new mine plan, has taken place over the last 18 months.

AngloGold Ashanti Chief Executive Officer, Kelvin Dushnisky, said producing first gold on budget and on a tight schedule was a “significant achievement” for the company, the community of Obuasi and Ghana as a whole.

“Restarting this important mine is testament to the focused execution by our team on the ground, as well as the clear investment framework and supportive environment created by the President of Ghana and his government, and the King of Ashanti,” he said.

Following a ramp-up period, AngloGold Ashanti estimates mining at a rate of 2,000 t/d from Obuasi during 2020, climbing to 4,000 t/d by year-end. The mine will be producing gold at an average run-rate of 350,000-400,000 oz/y for the first 10 years, and above 400,000 oz over the life of mine at all-in sustaining costs of around $800/oz, according to the company.

Graham Ehm, AngloGold Ashanti’s Executive Vice President of Group Planning and Technical, who is overseeing the project, said: “The team has done an excellent job completing the first phase of this project and will be focused on ramping up production through next year.

“The difficult decision was made to suspend production in 2014 to rebuild the mine’s foundation for a sustainable long-term future that will bring benefit to the region over the coming decades. We are tremendously proud of what has been achieved since then.”

The underground mine development is ongoing, with deepening of the Obuasi Deeps Decline and access to the KRS shaft on schedule for mid-2020. The construction of new plant and infrastructure will continue in 2020. The initial project capital for Obuasi remains in the range of $495-$545 million, spent between 2018 to the end of 2020.

AngloGold Ashanti says it is working closely with government and community stakeholders to ensure that the Obuasi mine is developed sustainably, fuelling growth for Ghana and benefitting the communities around the mine. A committee, including local stakeholders and regulators, has been created to track execution of the reclamation of the mine site and the mine will also be contributing $2/oz of gold produced to a Community Trust Fund, over its life, to facilitate development projects in the local area.

Some 80% of the capital thus far has been spent in-country, according to the Managing Director of the Obuasi Mine, Eric Asubonteng. “Ghanaian companies have been given preference in the procurement of goods and services, from the large-value underground mining contract all the way to catering and security contracts,” the company said.

Employment has also prioritised Ghanaians from the immediate area around the mine wherever possible, with Ghanaians from elsewhere in the country next in line for recruitment in available roles.

Pentium Hydro wins drilling and waterwell construction contract at Tropicana gold mine

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Vysarn’s wholly-owned subsidiary, Pentium Hydro, has confirmed another major mining contract, this time with the AngloGold Ashanti and Independence Group joint venture Tropicana gold mine in Western Australia.

Pentium, which was only acquired from Ausdrill last month, is to provide dual rotary drilling and waterwell construction services at the mine.

Earlier this month, Pentium announced a purchase order worth up to A$800,000 ($549,866) with Fortescue Metals Group at the Cloudbreak iron ore operation.

Under the contract, Pentium will drill and construct de-watering at various locations at the Tropicana mine site including the bore fields, tailings storage facility and open pit areas.

Pentium has commenced procurement of the long lead time materials with mobilisation of the drill rig and auxiliary plant to be completed by early October, Vysarn said. The scope of work is expected to commence shortly thereafter and be complete by mid December 2019.

Pentium Managing Director, Sheldon Burt, said: “This is the fourth rig mobilised by the company in less than a month since acquiring the hydrogeological drilling assets from Ausdrill and confirms the board’s confidence in the underlying demand for the company’s assets and services. We are delighted to be working for a company of AngloGold Ashanti’s standing.”

Tropicana is owned 70% by AngloGold (manager) and 30% by Independence Group. The open-pit operation poured first gold in September 2013.

Gold price rise revealing exploration deficit, Wood Mackenzie says

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Even though the resurgent gold price has garnered a renewed sense of optimism in the gold industry, a lack of exploration spend from miners means it is facing a potential period of secular decline over the long-term, according to Wood Mackenzie’s gold team.

Exploration budgets were slashed following the fall in the gold price from the highs that were reached in 2011/2012 and they have since failed to recover, according to Wood Mackenzie.

“The slight rebound in exploration spend we have seen over the past couple of years has largely been focused on brownfield projects and near-mine development,” the analysts said. “This has not been sufficient to replenish mined ounces and, as such, peak gold supply is now a very real possibility.”

Over the past couple of months, with gold breaking through $1,500/oz, it seems that exploration activity may be turning a bit of a corner.

The analysts provided evidence:

  • In late June, Agnico Eagle Mines started an exploration drilling program at its Amaruq site in an effort to convert underground indicated resources;
  • On September 4, Polyus announced the completion of an exploration drill program at its Sukhoi Log project (pictured) that totalled 203,647 m and is planning 30,000 m of infill drilling in 2020; and
  • On September 10, Newcrest reported that its exploration program on the Havieron project, located 45 km east of Telfer in Australia, has four operating drill rigs, which have cut 6,166 m and a fifth drill will begin in September.

It will be some time, however, before this activity translates into reserves and ultimately into production.

Proposed exploration budgets for the largest producers in 2019 remain fairly conservative compared with the levels reached in 2012, according to the analysts. It would therefore seem unlikely that the trend in declining reserves will be abated this year.

Producers have been very vocal in reaffirming their strategy of cost control, portfolio management and capital discipline, particularly since the run up in the gold price, ensuring they do not get criticised for the same type of costly M&A and marginal project spend they carried out in the previous gold price highs.

“How steadfast miners will be to this strategy into 2020 and beyond, if prices continue to remain well supported, remains to be seen,” the analysts said.

Due to insufficient exploration spend, gold reserves have depleted significantly with the global average mine life falling from 16 years in 2012, to an estimated 11 years in 2018, they said. However, the largest producers are not facing quite such an acute situation, with their collective average mine life still over 16 years. “It is perhaps therefore not so surprising that they can afford a more calculated approach to replenishing reserves.”

To secure their longevity as pillars of the gold industry, Wood Mackenzie said it has seen heightened M&A activity and miners focusing on their core assets. While this may help to bolster balance sheets through improved operational performance and realised ‘synergies’, it seemingly does little to address the problem the industry is facing with regards to how to sustain current production levels.

“We have, as of late, noticed an uptick in some majors opting to increase their footholds in a select few juniors with promising exploration opportunities,” the analysts said.

Agnico Eagle, AngloGold Ashanti, Kinross and Newcrest are actively investing in, or entering into joint-ventures with junior gold companies to create long-term value.

Agnico Eagle announced a proposal on June 24, 2019 for an all-share acquisition of Alexandria Minerals Corporation at a $0.05 per share premium to the Chantrell Ventures Corp offer; however, O3 Mining acquired Alexandria on August 1, 2019.

AngloGold Ashanti upped its stake in Pure Gold Mining to 14.3% on July 16, 2019, which owns the Madsen gold project in Red Lake, Ontario.

Kinross purchased the near-surface, early-stage Chulbatkan project in Russia from N-Mining Limited for a total consideration of $283 million on July 31, 2019.

And, Newcrest entered into a 70-30 joint venture with Imperial Metals on August 16, 2019, where Newcrest will be the operators of the Red Chris mine, a potential ‘Tier One’ asset in British Columbia, Canada, the gold miner has said.

The analysts said: “We expect to see this trend of increased M&A activity to continue, particularly amongst the more mid-tier gold producers as they look to solidify their own positions in the industry. This will likely encompass mergers with peers to unlock shareholder value and the acquisition of assets that majors have determined to be non-core.

“This may help to progress some later stage projects into production that have been sitting on the shelf for a number of years, but we are not anticipating a knee jerk reaction to current prices. Smaller projects which have a short payback period, in a low sovereign risk jurisdiction, are an attractive proposition and we could see a number of these projects being fast tracked into production.”

And, going forward, to address the predicament of declining reserves, if prices remain elevated miners may be inclined to review their reserve and resource price assumptions, the analysts said.

Barminco and Sandvik in mobile raiseboring world first

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Barminco, part of the Perenti Group, says it has become the first company globally to have taken delivery of a mobile raiseboring machine with uphole, downhole, and back reaming capability.

The hardrock underground mining services provider has been using Sandvik’s new Rhino 100 Mobile Raise Boring machine for 18 months in Ghana and three months in Australia, and has now added a module enabling back reaming capability to the machine.

The Rhino 100 is a fully mechanised and self-contained electro-hydraulic mobile raiseborer designed for slot raising in underground mining. Up until now, a back reaming module had not been used anywhere in the world on this rig, Barminco said.

Mick Radi, Barminco’s General Manager of Mining, said the new module – which had already been deployed at AngloGold Ashanti Sunrise Dam gold mine, in Western Australia – would enable safe, efficient upward and downward drilling providing maximum flexibility for clients.

“We are thrilled Barminco is offering a world first for our clients. The new plug and play back reaming module gives us the capability to quickly change from an uphole slotting machine to a conventional back reaming raisebore machine,” he said.

“The mobile carrier enables the Rhino to be totally self sufficient with no requirement for other fleet to assist in rig moves. Fast set up times and high drilling productivity is helping us to derisk our clients production plans and increase the certainty of meeting targets.”

Radi said the company had been successful using our Rhino 100 Mobile Raise Boring machine on its client’s sites in the Goldfields region of Western Australia and its plan was to keep the machine in this region where there is demand for this capability.

“The addition of this new module is just one of many ways Barminco is providing innovative solutions for clients, such as AngloGold Ashanti,” he said. “We have been working with AngloGold for 14 years and by providing this new capability we are helping them improve their operations to be even more efficient and safe.”

Bryan Watson, Manager Mining from AngloGold Ashanti, said the module was already making a significant difference on site.

“This new piece of equipment saves us time, is safer, and will assist us achieving production targets at Sunrise Dam,” Watson said. “We appreciate Barminco’s approach to working with us as a client to help us achieve more efficiencies on site.”

The down drilling module drills a pilot hole at 279 mm, up to a depth of 200 m. This can then be reamed to a diameter of 660 mm or back reamed to a diameter of 1.06 m. Back reaming can be achieved to a depth of 100 m with hole angles at a maximum of  15° dump, and 30° to either side from vertical.

The setup time for the machine is two hours, compared with a three to four day set up for a conventional raiseboring machine.