Total exploration expenditure in 2007 amounted to $167 million, of which $92 million was spent on greenfields exploration and the balance of $75 million on brownfield sites. The main aim of both exploration programmes is to identify new resource ounces of gold that are attributable to AngloGold Ashanti.
The main focus of AngloGold Ashantis 2007 exploration programme was on greenfields exploration, i.e. exploration in new terrains, notably in Australia, Colombia, and the Democratic Republic of Congo (DRC). Brownfields exploration, which is aimed at identifying replacement ounces for production, was undertaken around most current operations, with the most successful programmes being undertaken in Ghana, the United States of America, Australia, and Guinea.
Greenfields exploration activities were undertaken in seven countries Australia, China, Colombia, the DRC, Laos, the Philippines and Russia during 2007. A total of 378,014 metres of diamond, reverse circulation, and aircore drilling was completed during the year, drill testing existing priority targets and delineating new targets in Australia, Colombia, and the DRC. Greenfields activities in Russia, China, Laos, and the Philippines were predominantly undertaken through joint ventures and strategic alliances, with exploration activities in Laos eventually being discontinued in late-2007. While the discovery of new long-life, low-cost mines remains the principle aim of the greenfields exploration programme, AngloGold Ashanti is also committed to maximising shareholder value by exiting from or selling those exploration assets that do not meet its internal growth criteria and by opportunistically investing in prospective junior exploration companies.
A total of 6.95 million attributable ounces of gold (9.1 million ounces of gold on a 100% basis) of JORC-standard Inferred and Indicated Resources were delineated by AngloGold Ashantis greenfields exploration teams to 31 December 2007, at three prospects Tropicana (Western Australia), Mongbwalu (DRC), and Gramalote (Colombia). In addition, a significant drill programme and conceptual study are concurrently being undertaken at AngloGold Ashantis 100%-owned Colosa project in Colombia. The brownfields exploration programme for 2007 successfully added an additional 7.9 million ounces of gold to the companys Mineral Resource.
In 2008, exploration expenditure is expected to be some $185 million, with $77 million of this budgeted to be spent on greenfields exploration.
At Cerro Vanguardia, reconnaissance drilling continued on veins identified by regional mapping and geophysics. Drilling to extend some of the current ore shoots was successful and added 0.35 million ounces of gold and 6 million ounces of silver to the Mineral Resource.
Brownfields: At Sunrise Dam, brownfields exploration continues to focus on increasing the underground Mineral Resource inventory and increasing the confidence category of Mineral Resources so that Ore Reserve conversion can occur.
At Boddington Gold Mine, a maximum of seven diamond drill rigs were employed during the year to complete a total of 121,212 metres of drilling in 151 holes targeting in-pit Mineral Resource conversion and near-pit Resource extensions. By the end of 2007 attributable Ore Reserves were increased by 1 million ounces to 5.5 million ounces of gold. Since project approval in early 2006, attributable additions of 2.1 million ounces of contained gold of Mineral Resource and 1.7 million ounces of contained gold of Ore Reserve have been made.
Greenfields: The Tropicana Joint Venture covers approximately 12,000 kilometres and is located to the east and north-east of Kalgoorlie in Western Australia. The Joint Venture held by AngloGold Ashanti Australia Limited and Independence Group NL. AngloGold Ashanti holds a 70% managing interest in the joint venture with Independence Group NL free carried until completion of the pre-feasibility study. However, Independence has agreed to co-fund certain activities prior to the completion of the pre-feasibility study to ensure timely development of the project.
Drilling continued at the Tropicana prospect in 2007 with the mineralisation identified in the Tropicana-Havana zones moving into prefeasibility study assessment in May. The study is focused on assessing the viability and options for developing an open-pit gold mining operation. The Mineral Resource model for the pre-feasibility study was completed and an initial open-pit Mineral Resource (Inferred and Indicated) of 62.8Mt at 2.01g/t was announced in December 2007. The Mineral Resource was estimated using the assay data from nearly 141,000 metres of diamond and reverse circulation drilling at drill-hole spacings 50 metres by 50 metres and closer.
Reconnaissance exploration continues in parallel throughout the Tropicana joint venture tenements with a number of prospects identified by auger sampling and aircore drilling over a 40 kilometres strike trend north and south of the Tropicana prospect. Significant results have been obtained from limited aircore and reverse circulation drilling at the Beachcomber prospect, located approximately 200 kilometres south of the Tropicana prospect.
At Córrego do Sítio, drilling of underground deposits continued. A total of 40,500 metres were drilled during 2007 and were aimed at defining new orebodies and upgrading the level of information of known orebodies. Drilling concentrated on the Laranjeiras and the Paraiso orebodies. At Lamego, a total of 24,400 metres were drilled. The drilling consisted of a combination of deep drilling targeted at the depth extension of the Cabeca de Pedra and Arco da Velha orebodies, surface infill drilling at Arco da Velha and underground infill drilling at Carruagem. Regional geophysics, mapping and sampling continued.
At Serra Grande, in October 2007 a new deposit, Orebody Pequizáo, was identified between Mina Nova and Mina III. Drilling continues and a significant high-grade deposit is being targeted.
The current drill spacing is in the order of 200 metres by 50 metres. An aggressive targeting and follow up exploration programme over the lease area is planned for 2008.
AngloGold Ashanti has entered into three co-operative joint ventures (CJVs) with local partners at Yili-Yunlong (Xinjiang province), Jinchanngou (Gansu province), and Pingwu (Sichuan province). Business licences have now been issued by the respective local authorities for the Yili-Yunlong and Jinchanggou CJVs (with systematic ground exploration now underway), whereas the business licence for the Pingwu CJV is expected to be issued in early 2008.
A short (1,053m) diamond drill programme was completed on the Yili-Yunlong CJV in late-2007. The primary objective of this drill programme was to test the vertical continuity of outcropping gold-copper mineralisation, however, drilling only succeeded in intersecting weakly anomalous mineralisation at depth. At Red Valley (Qinghai), assay results from the 3,300 metres diamond-drill programme were also reviewed and confirmed the presence of only low-grade gold mineralisation within the principal targets. As a result, AngloGold Ashanti has elected to withdraw from earning into this CJV.
Regional exploration and target generation activities continued in Colombia during 2007. A conceptual economic study was also completed on the bulk-tonnage Gramalote prospect (Antioquia Department), where an Inferred Mineral Resource (100% basis) of 57.8Mt @ 1.14g/t Au (using a 0.5g/t Au cut-off) for a total of 2.12 million ounces of gold was delineated. The Inferred Mineral Resource for Gramalote was calculated using the assay data derived from the 13,060 metres of diamond drilling (in 43 drill holes) plus adit sampling completed to end-2007. On 14 February 2008, AngloGold Ashanti announced the signing of a binding agreement with B2Gold Corp, in which B2Gold will have the option to earn into 51% of the Gramalote Project. AngloGold Ashanti will be issued 25 million shares and 21.4 million warrants in B2Gold Corp in exchange for this additional interest in Gramalote and certain other mineral properties in Colombia.
Resource delineation drilling was also undertaken at AngloGold Ashantis 100%-owned Colosa porphyry gold prospect (Tolima Department). To the end of December 2007, approximately 12,000 metres of diamond drilling (42 drill holes) had been completed at Colosa. Additional drilling and a conceptual study are currently being undertaken at Colosa. An Inferred Mineral Resource is expected to be announced during 2008.
In July 2007, Antofagasta PLC provided AngloGold Ashanti with written notification of its intention to withdraw from the La Vega Mocoa (Southern Colombia) joint venture. While the field programme had been successful in identifying a number of gold anomalies (all of which are currently being followed-up by AngloGold Ashanti), no significant base metal anomalies of interest to Antofagasta were identified.
Exploration activities undertaken in the 10,000 square kilometres Concession 40 tenement (Ituri Province, northeastern DRC) included
A conceptual economic study for the Mongbwalu deposit was completed by the end of 2007, and confirmed an initial open pittable Inferred Mineral Resource of 33Mt @ 2.68g/t Au (using a 0.5g/t Au cut-off) for 2.93 million ounces of gold (100% basis) at Mongbwalu. The initial resource area lies within a polygon that covers both the Adidi sector and the Socumoto sector (which is located about 1 kilometre to the south-east of the past-producing Adidi mine). The conceptual study utilised the assay data from the 88,000 metres of diamond and drilling that has been completed at Mongbwalu by AngloGold Ashanti between mid-2005 and November 2007.
High-quality airborne geophysical data (airborne magnetics, radiometrics, and electromagnetics) were acquired over approximately 2,200 square kilometres (or nearly 25%) of Concession 40, using both fixed-wing and helicopter-based platforms. Interpretation of this geophysical data, in conjunction with compilations of the known geology and available geochemical data, form the basis of the regional target generation process. Drill testing of the highest priority regional targets is expected to be undertaken during 2008.
Drilling for the Obuasi Deeps project below 50 level continued with the areas below KMS and Adansi Shafts being targeted.
At Iduapriem, a total of 94 holes were drilled in Blocks 7 and 8 in an effort to upgrade the Inferred Mineral Resource to an Indicated Mineral Resource. Modelling began in the fourth quarter and results are awaited.
Drilling at Siguiri in 2007 focused on infill drilling at the following deposits: Sintroko (8 kilometres south of the plant), Kintinian (4 kilometres north), Foulata (45 kilometres north west) and the spent heap leach. Mineral Resource extension drilling continued for the same deposits. Reconnaissance drilling was conducted to follow up on anomolies identified in Block 3 (35 kilometres north-east) and Block 4 (70 kilometres north-east). Surface geochemical sampling began on four new exploration licences situated to the north of the mine. An airborne electromagnetic survey was flown in the second quarter and follow up on the identified targets has started.
The strategic exploration alliance in Laos between AngloGold Ashanti and Oxiana Ltd expired in December 2007 and was not extended by mutual agreement.
At Morila, the regional drilling programme of 92 holes was completed during the first quarter and an intensive data integration and interpretation phase started. Work supported by international researchers continues in order to optimise the exploration process. During the year, two diamond holes were drilled to the west of the pit to examine the continuity of the orebody between the main deposit and Samacline. A further four diamond holes were drilled in the fourth quarter to follow up on potential extensions to mineralisation in areas identified as being prospective. Minor geochemical and pitting programmes were also conducted during the year.
At Sadiola, Phase 8 drilling, aimed at upgrading the Inferred high-grade zones of the main body and the footwall mineralisation, was completed in the second quarter. A full review of the geological model for the lease was completed and as a result two fence lines of diamond holes were drilled between the FE3 and FE4 deposits and through the FE4 deposit in order to follow up on potential mineralisation trends. Results are still awaited for this drilling. During the year Mineral Resource delineation drilling was completed at Tembali South.
At Yatela, a small satellite to the main deposit was discovered to the north-west of the main pit and the final infill drilling is currently being completed. Definition drilling of the Dinguilou oxides was completed and modelling is on going. A programme to investigate the deep sulphide breccias developed below the main deposit was started during the year and will continue in 2008.
At Navachab, drilling concentrated on areas around the main pit particularly to the north-west and the west and in the Gecko Area. Promising results were obtained from the pit area and further drilling is planned in 2008. At Gecko, the central deposit was drilled to grade control spacing in order to test the continuity of the mineralisation and further drilling was conducted on the south, north and far north extension. A stream sediment sampling programme was conducted, both on and off lease, in order to follow up on previous work and to target new areas.
Work continued on finalising the joint venture agreements with the two Red 5 prospects, Mapawa and Outer Siana. The start of detailed exploration at Mapawa currently awaits granting of a Mineral Production Sharing Agreement (MPSA) by the Mines and Geosciences Bureau in Manila.
Significant efforts were focused on finalising the formation of the Polymetal/AngloGold Ashanti strategic alliance. In June 2007, AngloGold Ashanti concluded the purchase of Trans-Siberian Golds interests in the Veduga and Bogunay projects in Krasnoyarsk for a consideration of $40 million, with the objective of contributing these assets to the new strategic alliance. In return, Polymetal has agreed to contribute two projects to the alliance Imitzoloto and Eniseevskaya with a value of $16 million and to make an initial payment of $12 million to AngloGold Ashanti. The Russian management company for the strategic alliance, Zoloto Taigi, has now been registered. By end-2007, the joint venture team had assumed management of exploration activities in the four initial project areas (Bogunay, Anenskoye and Veduga in the Krasnoyarsk region and Aprelskovkoye in the Chita region). In addition, the joint venture had successfully acquired the 390 square kilometre Sovremenie Prospect in the Krasnoyarsk region at auction.
AngloGold Ashanti continues to hold a 29.8% shareholding in Trans-Siberian Gold (TSG), whose primary asset is the near-production Asacha gold-silver project in Kamchatka.
At Moab Khotsong, five surface diamond holes were drilled during the year. MZA9 completed its initial deflections on the Vaal Reef and a long deflection to the east is underway. MGR7 completed its deflection programme on the Vaal Reef in the third quarter. MMB5 continues to drill. MCY4 was reopened in the third quarter and a long deflection to the east is currently being drilled. MCY5 was also started in the third quarter and continues to drill.
Borehole G54, at Tau Lekoa, was started in the fourth quarter and deflection drilling continues.
At Geita, drilling at various levels continued at Kukuluma/ Matandani, Area 3 (south, central and west), the Lone Cone the Nyankanga Gap and the Nyakabale-Prospect 30 area. An intensive phase of reconnaissance drilling was completed on various parts of the mining lease and will continue into 2008.
At Cripple Creek & Victor in Colorado, drilling of the mine life extension project area continued during the year and was concentrated on the Altman, Globe Hill, Schist Island and Control Point areas. Development drilling was focused around Cresson, South Cresson and Schist Island. A total of 94,996 metres in 452 holes were drilled.
AngloGold Ashanti Annual Report 2007 – Annual Financial Statements