Back-to-life Obuasi mine to drive AngloGold production

AngloGold Ashanti has projected its Obuasi mine as a key driver of its group gold production over the next two years.

In a report to investors, the Johannesburg-listed company said it expects an average of two percent compound annual growth rate (CAGR) in gold production over the next two years, relative to 2020 production, from continuing operations.

“The primary driver of production growth is related to Obuasi operating at steady-state, as well as Tropicana reverting to normalised production levels following the reinvestment in its life extension, and AGA Mineração, Siguiri and Sunrise Dam expected to increase production to higher levels,” the company said.

The company further indicated that the development of ore reserve remains key to the long-term success and sustainability of AngloGold Ashanti; hence, it is committed to enhancing operational flexibility and extension of the lives of its existing mines by converting its mineral resource into better-defined ore reserve as well as growing its mineral resource base.

“This focused investment program, now in its second year, continues to build on the positive momentum garnered in 2020, and these investments are expected to position the company to add ore reserve as well as, where applicable, mineral resource.”

At the end of 2020, the company said its Iduapriem mine produced 275,000 ounces (oz) of gold at a total cash cost of US$731/oz, compared to 275,000oz at a total cash cost of US$815/oz in 2019. The 10 percent decrease in total cash costs resulted from capitalising pre-stripping costs at Teberebie Cut 2 and power subsidies received from the Government of Ghana to ease the impact of COVID-19.

However, this was partly offset by increased royalties as a result of the higher gold price received and the drawdown of ore stockpiles in 2020.

The company noted that a decision was taken in the second half of 2020 to invest in and accelerate Teberebie Cut 2 waste stripping at the Block 7 and 8 pit, which will extend into 2021.

It further stated that a portion of the high planned waste stripping in 2021 was brought forward to the fourth quarter of 2020. As a result, mined volumes increased on the back of this investment, with the operation on track to bring forward ore delivery to the mill.

“This strategic investment is aimed at assisting the operation in reaching the ore zone earlier, thereby increasing the confidence in gold production for 2021,” it said.

Commercial production at Obuasi for Phase 1 was achieved effective October 1, 2020, with the mine producing 30,000oz at a total cash cost of US$1,145/oz in the fourth quarter of 2020.