Name and Location
Obuasi gold mine revival project, Ghana.
Client
Randgold Resources and AngloGold Ashanti have concluded an investment agreement aimed at the formation of a joint venture (JV) to redevelop and operate AngloGold Ashanti’s Obuasi gold mine.
Forming the JV is conditional on the satisfaction of several conditions, which include approval by the boards of Randgold and AngloGold of the final development plan prepared by Randgold, and of the transaction by the South African Reserve Bank, consent by the lending banks under certain existing financing agreements of AngloGold, Randgold’s completion of due diligence and receipt of any applicable antitrust approvals.
The JV is also conditional on receipt of the necessary approvals for the implementation of the development plan and the establishment of the JV by the government of Ghana on terms acceptable to AngloGold and Randgold, which are planned to be concluded by March 31, 2016.
Project Description
Obuasi is a large, high-grade deposit, with proven and probable ore reserves of 24.53-million tonnes at 6.70 g/t for 5.29-million ounces, according to the AngloGold 2014 annual report.
In terms of the proposed JV agreement, Randgold will lead and fund a development plan designed to rebuild Obuasi as a viable long-life mining business with an attractive cost structure and returns.
AngloGold initiated a programme to modernise the mine in 2012 by starting the development of a ramp access that would ultimately run from surface to high-grade blocks of ore underground.
The ramp will supplement current vertical hoisting infrastructure and help debottleneck the underground operation by allowing for greater ease in transporting people and materials underground, and transporting ore to surface.
This was a necessary step ahead of the envisaged transformation of the mine into a modern, mechanised operation.
Net Present Value/Internal Rate of Return
Not stated.
Value
Assuming all conditions pertaining to the agreement are satisfied, Randgold and AngloGold will be jointly responsible for funding the redevelopment of Obuasi, in line with the agreed development plan.
Duration
Randgold is expected to deliver the new development plan to both parties’ boards by January 31, 2016.
Latest Developments
None stated.
Key Contracts and Suppliers
None stated.
On Budget and on Time?
Not stated.
Contact Details for Project Information
Randgold Resources, tel +44 20 7557 7738 or email randgold@dpapr.com.
AngloGold Ashanti investor relations, Stewart Bailey, tel +27 11 637 6031 or email sbailey@anglogoldashanti.com.