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01.05.2006 Business & Finance

AngloGold mulls expansion in Ghana

By I-Net Bridge
AngloGold mulls expansion in Ghana

Iduapriem Managing Director David Renner said during a media tour that the group is likely to decide by the middle of 2006 whether to proceed with the $25 million expansion.

If the expansion were to proceed, $15 million would be spent in 2006 and the remaining $10 million in 2007, Renner commented.

In addition to the increase in ore processing, the expansion was also likely to result in a 10-15 percent decline in costs at Iduapriem, he said.

Since 1993, Iduapriem's gold output has varied from just under 100 000 ounces in 1993 to a peak of just below 250 000 in 2004.

In 2005, the mine produced 205 000 ounces of gold and in 2006 output is forecast at over 200 000.

Cash cost in 2006 is forecast at $320 per ounce.

In 2005, Iduapriem's total cash cost was $348 per ounce and the adjusted gross loss attributable to AngloGold Ashanti was $2 million.

The expansion would result in increasing the mills from three to four as well as adding a crushing plant.

The greenlight for the project was likely to be received by June 2006 and the expansion was likely to take 12 to 15 months to complete, Renner said.

At the end of 2005, the Iduapriem mine had total estimated mineral resources of 66.585 million tonnes at a grade of 1.66 grams per tonne, while ore reserves were 45.907 million tonnes at a grade of 1.71 grams per ton.

Iduapriem is an open pit gold mine located in the western region of Ghana and formed part of Ashanti Goldfields, which merged with AngloGold in April 2004.

The mine's current projected life is to 2018.

AngloGold Ashanti has an 85 percent stake in the mine and the World Bank's International Finance Corporation has a 15 percent interest.

Iduapriem's total workforce, including contractors, is 1 222 employees.

Ghana contributed 685 000 ounces to AngloGold Ashanti's gold output and was the second largest contributor to output after the group's South African mines during 2005.