The company said that a feasibility study at the Boston Shaker Project has confirmed that underground mining is technically and financially viable and demonstrates an anticipated IRR of 39% for a capital investment of $79.3m (100%).
Boston Shaker is expected to produce higher grade mill feed, with in an improved gold production profile and enhanced cash flow. The underground mine in particular, is expected to provide improved cash flow during the period of 2021-2023.
Ore from the underground mine would allow gold production at Tropicana to be maintained at between 450,000-500,000ounces per annum (100%) over the next five years.
The company is expected to start the project in the June quarter of 2019 and first gold is scheduled for the September quarter in 2020.
AngloGold Ashanti chief operating officer Ludwig Eybers said: “Underground mining at Boston Shaker will leverage further value from this high performing operation, achieving pay-back in just over three years. An ongoing focus on Operational Excellence has enabled Tropicana to consistently exceed expectations, and I am sure this world class performance will extend into the underground operation.”
The company has made investments at the Tropicana processing plant, which includes the second ball mill, commissioned in November 2018. The expanded ore production from the mine will capitalize on that investments, increasing throughput capacity to 8.1Mtpa.
With the Boston Shaker ore body remaining open at depth, the JV partners will continue to test high grade extensions to the Mineral Resource beneath the Tropicana and Havana pits to identify potential for further underground mining operations.
An underground mining contract has been awarded to Macmahon Holdings, the mining alliance partner at Tropicana since the beginning of open pit mining in 2012.
Macmahon operates both the open pit and underground mines and average underground mining costs, including geology, are anticipated to be between $55-$60/ton.
The Boston Shaker is estimated to hold an underground mineral resource estimate of 12.5 Mt at 4.2 g/t for 1.7 Moz.
