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You are here: Home > 2000 > Ashanti, Anglogold open new mine in Tanzania

Ashanti, Anglogold open new mine in Tanzania

Monday, July 31, 2000
Three African countries - Tanzania, Ghana and South Africa -showcased their combined mining mettle today (Thursday, 3 August, 2000) at the official opening of the Geita Gold Mine in Tanzania, a joint venture between Ghanaian-based Ashanti Goldfields Limited (Ashanti) and South African-based AngloGold Limited (AngloGold).

The President of Tanzania, Benjamin William Mkapa, delivered the key note address and performed the official opening. Other speakers included the Tanzanian Minister of Energy and Minerals, Dr Abdallah Kigoda; the CEO of Ashanti, Sam Jonah and the CEO of AngloGold, Bobby Godsell. Among those present at the high profile event were the South African Minister of Minerals and Energy, Ms Phumzile Mlambo-Ngcuka; the Ghanaian Minister of Mines and Energy, Dr John Abu; the Tanzanian Minister of Finance, Daniel Yona; the Tanzanian Minister of the Environment, Edward Lowasa; and the South African High Commissioner, Ms Theresa Solomon.

Geita Gold Mine - situated in north western Tanzania, 90 km from the regional capital of Mwanza - was completed in less than a year from first concrete pour to first gold pour; more than three months ahead of schedule; and within the budgeted capital cost of US$165 million. The mine's first gold was poured on 8 June this year and to date, more than 41,000 ounces have been produced during the commissioning phase.

500 000 ounces a year, cash costs below US$180, significant potential for increase in resources and reserves

Geita Gold Mine is already the biggest gold producer in East Africa.

Full production capacity should be reached by 2001, with an average of 500,000 ounces a year produced for the first five years, at a cash cost expected to be below US$180 per ounce. Plant capacity is currently 4 Mtpa but there is potential to expand this to 7 Mtpa with little incremental capital.

A significant increase in resources has occurred over the past year, with the current resource base now more than 12.0 million ounces. Currently defined reserves stand at 49Mt @ 3.5 g/t (approximately 5.5 million ounces), providing a 12-year mine life, even at the current low gold price.

Mining, processing, environmental management

Mining is carried out using selective mining techniques to maximize process plant feed and optimise project economics. The ore is processed using conventional carbon in leach technology, assisted by oxygen injection and a gravity circuit. An in-line leach reactor, one of the first on the African continent, has also been installed to boost gold recovery.

The plant boasts the largest shell-mounted mill in the world and has state-of-the-art, integrated control systems to optimise reagent consumption and throughput. The project is developing stringent safety and environmental management systems, based on the internationally recognized ISO14001.

Ashanti Goldfields, AngloGold partnership

In April this year, it was announced that Ashanti would sell an effective 50% interest in the Geita project to AngloGold, and that the mine would be managed jointly by the two African mining giants. At the same time, they entered into a broader strategic alliance to seek opportunities to work together throughout Africa, including their home countries.

The Geita joint venture has been strengthened by the inclusion of AngloGold's Nyamulilima Hill property (some 14 km from the Geita process plant), adding approximately 2.1 million ounces to the current resource base.

Management of the property has already been transferred to the joint venture management team and this resource is expected to significantly improve the overall project value as reserves are defined.

AngloGold CEO Bobby Godsell praised the Tanzanian Government at today's ceremony for creating "a policy, tax and regulatory environment attractive to mining investors".

"We look forward to a long and productive relationship with the Government and people of Tanzania," Godsell said.

Positive impact on the Tanzanian economy

Geita Gold Mine has already made a significant, positive impact on the Tanzanian economy. More than 1,700 people were directly employed during the construction of the mine, 1,350 of whom were Tanzanian. More than 100 Tanzanian companies received business from the mine. The current workforce is 500, more than 85% of whom are Tanzanians.

Now that the mine is developed and operational, intensive training has begun for Tanzanian employees. This has already involved the secondment of Tanzanian engineers, geologists and metallurgists to other countries to gain operational exposure. The objective is to reduce the non-Tanzanian component of the workforce to less than 5%.

Speaking at today's event, Ashanti Goldfields CEO Sam Jonah referred to a number of Ghanaians who had been empowered to undertake major mining projects, including Geita, and said such steps were "a measure by which Ashanti's commitment to manpower and development should be judged".

"We believe that, given the encouragement, the right training and the opportunity, our Tanzanian brothers and sisters will be capable of emulating these examples. That is what Ashanti stands for, and that is what Ashanti has decided to establish here," Jonah said.

The neighbouring town of Geita has been the fastest growing urban centre in East Africa during the past two years. Housing and business development has led the way in its transformation to a vigorous, vibrant community.

As part of the parent companies' social responsibilities, significant improvements have been made in local communities. A 67-kilometre road from Ilogi to Geita has been constructed, providing an uninterrupted, quality transport route from Dar es Salaam to Geita. In addition, a 22-kilometre water pipeline from Lake Victoria has made water available to villages along the route. Power and water, as well as a new ward, have been provided to the Geita District Hospital and, in addition, new primary and secondary school facilities are being established.

Certain of the statements made in this announcement are forward-looking in nature. By their nature, the forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. These factors include, but are not limited to, statements made elsewhere in this announcement. In addition, risk factors relating to Ashanti and AngloGold can be found in their respective public SEC filings. Neither Ashanti nor AngloGold undertake any obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Any statement should be evaluated in the light of these factors.

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