Record high gold prices will allow Mali and its partners to continue producing from the country's top gold mine until 2020, seven years past the initial closure date, the government said on Monday.
In the last three days alone however, gold has fallen by over 10 percent in its largest three-day slide in 28-1/2 years, having lost more than 20 percent since hitting record highs just shy of $2,000 an ounce earlier this month.
The high price will allow Mali's state mining company SFI and its partners Anglogold and Iamgold to exploit gold reserves underground at the Sadiola mine that were previously deemed too costly to reach.
Gold sulfide operations were not included in the initial feasibility study at Sadiola because its profitability was marginal given the price of gold at the time, Lassana Guido, head of Mali's National Directorate of Geology and Mines, the research arm of the Mines Ministry, said.
Now the price is continuing to break record heights, and we are also in very advanced talks to have the Mali Power Company power the mine at a very favourable price, he added.
The Sadiola mine produced just over 10 tonnes of gold in 2010, about a quarter of national industrial production, and was scheduled to be shut between 2013 and 2014.
Guido did not say what production level was expected during the extended phase of the mine's life.
Officials at Anglogold and Iamgold were not immediately available to comment.
Mali, a largely desert country and Africa's third largest gold miner, relies on gold for about 70 percent of its exports and 15 percent of its gross domestic product.
Its gold output has been hit in recent years by slowdowns at some of its oldest mines.
The country expects to produce just under 50 tonnes of gold in 2011, including 4 tonnes produced by artisinal miners.