JOHANNESBURG (miningweekly.com) - South African gold mines now represent around 13% of the AngloGold Ashanti portfolio, AngloGold Ashanti CEO Srinivasan Venkatakrishnan (Venkat) said on Tuesday.
The fall in the contribution from AngloGold's South Africa region mines follows the sale of Moab and Kopanang and the closure of the Tau Tona gold mine, which leaves the Johannesburg- and New York-listed gold mining company with only two remaining South African gold operations - Mponeng, the deepest mine in the world, and Mine Waste Solutions (MWS), a surface operation. (Also watch attached Creamer Media video).
However, significant investment is continuing, with $66-million going into Mponeng, of which $11-million is on extension project work and $55-million on nominal reserve development. The extension provides access to a substantial 12.5-million-ounce gold reserve within the massive 50-million-ounce Mponeng resource.
The feasibility study for Mponeng's Below 120 life-of-mine extension project, which takes in both the Carbon Leader Reef and the Ventersdorp Contact Reef, is scheduled for completion during the latter part of 2018.
"We've resolved the burning questions around the structure of our South African base, monetising some assets and putting other unprofitable ones into orderly closure. That puts South Africa at a little over 10% - around 13% - of our portfolio, though crucially with a long-life contribution that will improve in quality over time," Venkat said at the presentation of half-year and 2017 results for the 12 months ended December 31.
Priorities going forward were, he said, working towards the completion of the South African asset sales and the optimisation of the remaining services and support businesses to ensure that they match the remaining production.
During 2017, the South Africa region produced 903 000 oz of gold at an all-in sustaining cost (AISC) of $1 245/oz, well up on the AISC of $1 080/oz in 2016.
On the current state of the company's revolutionary reef-boring technology programme that aimed at providing gold around the clock safely, Venkat said in response to Mining Weekly Online that the technology had been slimmed down to those aspects that would be useable at Mponeng, notably high-strength backfill.
"In terms of Mponeng, there's very good potential as we enter into higher grades. Certainly now having got the bulk of the Below 120 Project expansion out of the way, we'll start to see good production and cash flows come from the mine," he said.
The single biggest lever at Mponeng was the shift arrangement, around which approaches were being made to increase the shift duration on a five-day work week basis.
"What we have down tuned is the pure reef boring initiative that we had," South Africa region COO Chris Sheppard said, adding that the decision to do so was ultimately financial.
He said the current focus was on thermal spalling, a process of using temperature variation to break rock, which was showing promising results under research and development.
"It's working," Sheppard said of thermal spalling.
The ultra-strength backfill of the curtailed reef-boring project, which was being continued with the thermal spalling, was envisaged for use at Mponeng to increase extraction rates by reducing regional pillar sizes helped by the use of backfill, or alternatively, keeping the mine design as is and creating a safer mine by reducing the seismic potency.
Grades at Mponeng recovered to average 8.5 g/t in the last quarter of last year.
"We're starting to see the good potential that exists as we get further into the Below 120 Project ramp-up," said Sheppard.
Access to deeper higher-grade ore, to help grow production by 10% in 2018, is scheduled to take place from mid-year when the Below 120 Project first-phase decline system descends below the current secondary shaft.
A Section 189 process has been completed for the closure of the Tau Tona gold mine, where the final blast took place in September.
AngloGold Ashanti's MWS tailings and rock retreatment operation on surface lifted production by 19% in the 12 months to December 31 on higher grades and better gold recovery.
Two fourth-quarter fatalities occurred at Mponeng in a fall-of-ground incident in November.
"The potential for seismic activity remains a dark cloud over our intensifying safety practices," Sheppard told a results presentation attended by Creamer Media's Mining Weekly Online.
The company achieved guidance for the fifth straight year in 2017, producing 4% more, and advancing brownfield projects according to plan - all while generating $125-million in free cash flow before growth investment.
Its outlook for 2018 sees improvements across key metrics and also a decision to move ahead with redevelopment of its Obuasi gold mine in Ghana, subject to Parliamentary ratification.
Production rose to 3.755-million ounces at an AISC of $1 054/oz in the 12 months through to December 31, 2017, from 3.628-million ounces at $986/oz in the previous year, despite restructuring in South Africa.
The production and cost performance funded the reinvestment and restructuring programme.
Projects all have attractive payback periods, with capital expenditure expected to fall in 2018 despite the decision to reinvest at Obuasi.