By Kishori Krishnan Exclusive To Gold Investing News
It is one big company and it has big ambitions. Africa’s largest gold producer, AngloGold Ashanti Ltd., is studying a A$520 million (US$ 426 million) mine development in Western Australia state with venture partner Independence Group NL. AngloGold, owner of a 70 per cent stake in the Tropicana project, and Independence have approved a study into the proposed development, which is expected to produce between 330,000 and 410,000 ounces of gold annually from 2013, the Johannesburg-based company has said.
Belmont-based Independence Group has said production could start by early 2013. The decision follows the positive outcome from the prefeasibility (PFS) study that was carried out over the past 12 months.
The PFS study was based on an ore processing rate of 6 million tonnes each year, open pit mining of the Tropicana and Havana deposits and the development of supporting infrastructure.
Cash costs have been projected at between $590 an ounce and $610/oz on an owner mining basis or between $690 and $710/oz on a contract mining scenario.
Capital cost of plant and infrastructure, excluding mining fleet capital, has been estimated at around $520 million, but could be revised with the cost largely derived during the ‘boom’ period in 2008, Independence said.
“Mining costs will depend on whether contract mining or owner mining is selected (owner mining fleet capital is estimated to be $A170-$A190M, before owner costs and contingency),” Independence said.
Both project partners said the BFS will be based on a 6 million tonne a year operation with owner and contract mining options further evaluated.
AngloGold vice president Australia Mike Erickson said he expected the feasibility study to be completed by mid-2010. He added that development would take about two years and commissioning could begin as early as the first quarter of 2013, if necessary approvals are obtained within the budgeted time.
Not to be forgotten, AngloGold is also currently in a 50-50 partnership with fellow South African Randgold Resources to bid for Toronto-listed Moto Goldmines, and that company’s 22.5m oz of gold in the Democratic Republic of Congo.
Moto was originally listed on the ASX, but moved its listing to Canada because it could not access the sums of money needed here in Australia. Incidentally, last week, Moto announced some more drilling results, including 116m at 7.67 grams/tonne and 72m at 6.87 g/t. If these drilling results would have been made available in Western Australia, there would have been a stampede of prospectors to the area, said traders.
Moto Goldmines Ltd (MGL.TO) said its board determined that Randgold Resources Ltd’s (RRS.L) offer of C$5.00 a share for the company was potentially superior to Red Back Mining Inc’s (RBI.TO) bid.
On July 16, Randgold had made an unsolicited offer of C$546 million (US$ 488 million at that time) that topped Red Back’s offer of C$513 million.
AngloGold is also looking to develop the large La Colosa gold deposit in Colombia. The African mining major is also looking at a West Australian project.
The quarterly report from Midas Resources (MDS) notes that AngloGold has been carrying out a scoping study on the junior’s Fortitude deposit, with a view to deciding whether involvement in further exploration would be of interest.
Fortitude lies within the Lake Carey gold project, 100km south of Laverton and on the same geological corridor that hosts Sunrise Dam (where 8m oz of gold were found), Wallaby (7m oz) and Granny Smith (1.8m oz).
AngloGold Ashanti Ltd. has posted solid gains since first being featured as a momentum stock on Feb 9 in response to the company’s strong first-quarter results, reported on May 15.
Income was up from last year, coming in at $150 million from a loss of $17 million. Earnings totaled 42 cents per share, up from a 5 cent loss last year. The company said that it benefited from higher spot gold prices, increased production and a lower discount rate. Gold spot price was up 14 per cent; received price up 25 per cent quarter-on-quarter
Analysts maintain the current-year estimate has been mostly flat for the last few months, currently up 6 cents from 90 days ago to $2.31 per share. The next-year estimate is up 34 cents to $2.27, but should be taken with a grain of salt. This earnings target will fluctuate significantly with underlying gold prices, the primary driver of this stock’s performance.
Shares of AU have been trending higher since bottoming out just above $13 last November, having since topped the $43 mark. Shares have since pulled back a bit, but remain in elevated territory.
On Monday, gold price climbed in Asia, trading near the highest in six weeks, as gains in regional equities and oil helped to boost demand for the precious metal.
Bullion gained as much as 0.5 per cent as the MSCI Asia Pacific Index of equities climbed for a 10th day to its longest winning streak since 2004, on confidence a rebound in regional economies will boost earnings. Crude oil advanced to a three-week high on expectations the equity gains are a precursor to a recovery in the global economy.
“With stocks and oil prices buoyant, sentiment for gold is being well supported,” said Han Sung Min, a commodities trader with KEB Futures Co. in Seoul.
Gold for immediate delivery climbed as high as $956.28 an ounce. The precious metal will trade between $924 and $970 this week, said Chris Yu, head of the overseas market trading team with Samsung Futures Co. in Seoul.
Fourteen of 24 traders, investors and analysts surveyed by Bloomberg News, or 58 per cent, said bullion may rise. Six forecast lower prices and four were neutral.
Blackrock Resources Inc. (BCKR.OB) has signed a letter of agreement with Global Minerals Ltd, a British Columbia company, to enter into a joint venture to develop and exploit Global Minerals’ Front Range gold mining project located in the Gold Hill Mining District, Boulder County, Colorado.
Under the terms of the agreement, Blackrock will pay $100,000 to Global Minerals upon signing of a formal joint venture agreement on or before September 15, 2009. The joint venture will be owned 50 per cent by Blackrock and 50 per cent by Global Minerals. To date, Global Minerals has spent approximately $8,000,000 on developing this mining project.
The property has a mill on site that has historically processed 50 tons of ore per day. Through the means of the joint venture, Blackrock intends to increase the mill capacity to between 100 to 200 tons of ore per day, which would produce between 100 to 200 ounces of gold or gold equivalent per day
Conquest Resources Ltd, a gold exploration company, was fined $130,000 under the Occupational Health and Safety Act in the death of a worker. In December, 2007, Conquest hired an independent contractor to build an ice road on Sturgeon Lake, two hours north of Toronto, to service drilling activities.
The worker drove onto the lake to begin plowing, fell through the ice and drowned. A Ministry of Labour investigation found the worker was not given any current, accurate information about the thickness of the ice.
The company pleaded guilty under the act to failing, as an employer, to provide information, instruction and supervision to the worker to protect his health and safety.