Review of operations: Namibia (PDF - 139 KB)

Review of operations

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Namibia

AngloGold Ashanti has a single operation in Namibia, the Navachab mine. In 2005, the mine produced 81,000 ounces of gold at a total cash cost of $321 per ounce.

Navachab

Description: AngloGold Ashanti owns 100% of the Navachab open-pit gold mine, which is located near Karibib in Namibia, on the southern west coast of Africa.

Geology: The Navachab deposit is hosted by Damaran greenschist-amphibolite facies, calcsilicates, marbles and volcano-clastics. The rocks have been intruded by granites, pegmatites and (quartz-porphyry dykes) aplite and have also been deformed into a series of alternating dome and basin structures. The mineralised zone forms a sheet-like body which plunges at an angle of approximately 20 degrees to the north-west. The mineralisation is predominantly hosted in a sheeted vein set (?60%) and a replacement skarn body (?40%).

The gold is very fine-grained and associated with pyrrhotite, and minor trace amounts of pyrite, chalcopyrite, maldonite and bismuthinite. Approximately 80% of the gold is free milling.

Operating performance

In 2004, AngloGold Ashanti assumed control of the mining operations at Navachab from the mining contractor, employing additional people and purchasing its own equipment. This transition to owner-mining meant that only limited operations were conducted in the first half of that year.

In 2005, gold production rose by 21% to 81,000 ounces as grade increased to 2.05g/t. A crusher failure in April resulted in significant downtime, adversely affecting tonnages in the second quarter.

Total cash costs decreased by 8% to $321 per ounce as a result of the increased gold production.

Gross profit adjusted for the effect of non-hedge derivatives increased to $10 million as a result of higher production, lower costs and the higher gold price received.

Capital expenditure of $5 million was significantly down on the previous year which included expenditure on the transition to owner-mining. Expenditure during 2005 was mainly on additional owner-mining facilities, mining equipment, plant automation and ongoing exploration.

Navachab 2005 2004 2003 Pay limit (oz/t) 0.05 0.05 0.04 Pay limit (g/t) 1.65 1.46 1.38 Recovered grade (oz/t) 0.060 0.046 0.051 Recovered grade (g/t) 2.05 1.59 1.75 Gold production (000oz) 81 67 73 Total cash costs ($/oz) 321 348 274 Total production costs ($/oz) 326 389 296 Capital expenditure ($ million) 5 21 2 Total number of employees 315 251* 389    Employees 315 251 180    Contractors – – 209 * No mining labour, contract or otherwise, was on site during the first half of 2004.

Gold production (000oz) Navachab

Total cash costs ($/oz) Navachab

Capital expenditure ($m) Navachab

Growth prospects

Previous studies on a potential pit expansion, which was then uneconomical, are being reconsidered given the current outlook for the gold price. Several brownfields prospects are located within trucking distance and are currently under investigation.

Outlook

Gold production is expected to rise to between 81,000 ounces and 85,000 ounces in 2006, at a total cash cost of $301 per ounce to $313 per ounce. Capital expenditure of $1.4 million is planned.