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Tanzania

For information on the regulatory environment and licence to operate in Tanzania, refer to the section entitled Regulatory environment enabling AngloGold Ashanti to mine.

Geita

Description

The Geita gold mine is located in the Lake Victoria goldfields of the Mwanza region of Tanzania, about 120km from Mwanza and 4km west of Geita Town. The mine is wholly owned and managed by AngloGold Ashanti.

The Geita gold deposit is an Archaean mesothermal orebody, largely hosted in a banded ironstone formation. It is a multiple openpit operation with underground potential and is currently serviced by a 5.2Mt per annum carbon-in-leach (CIL) processing plant.

Key statistics

Safety

Safety performance improved at Geita during 2009 with no fatalities being recorded during the year. The LTIFR for 2009 was 0.10 (2008: 0.86) per million hours worked, significantly better than the previous year.

A high degree of focus was maintained on safety with specific emphasis on hazard identification and reporting. Further, a motivation scheme was launched which led to a significant decrease in accidents and damage.

Geita also maintained its OHSAS 18001 certification.

Operating performance

Production at Geita increased by 3% to 272,000oz in 2009. Significant quarterly improvements were achieved during the course of the year with gold production rising from 44,000oz in the first quarter, when output was hampered by a mill breakdown and a general maintenance backlog, to 81,000oz in the fourth quarter of the year.

Improved mining performance yielded access to higher-grade orebodies in the second half of the year, resulting in an average annual yield of 1.89g/t.

Process-plant throughput was still very low at the beginning of the year as a result of the failure in January 2009 of the SAG mill gearbox, together with several other breakdowns in the plant. A focus on asset integrity and the overarching maintenance strategy led to improved plant availability during the year. While Geita continued with owner mining, Ausdrill Tanzania Limited was awarded the drilling-and-blasting contract from July 2009 in order to improve productivity and quality.

A 31% increase year-on-year in total cash costs to $954/oz was a result of increases in the cost of key inputs, including that of reagents and mining contractors, as well as unfavourable movements in ore stock piles and the inclusion of deferred stripping costs. These increases were partially offset by a decline in fuel costs.

Various turnaround initiatives were implemented at Geita which included the overarching Project ONE, as well as the Business Process Framework (BPF) and Systems for People (SP). The focus on good operating practice and systems has resulted in enhancements to mining, geological modelling and processing productivity and efficiency. The improvements in mining productivity together with a review of the mining plan have led to a planned rationalisation and reduction in the fleet which will be implemented throughout 2010.

Capital expenditure for 2009 totalled $19m and was spent on plant improvements, a tailings facility raise, resource-definition drilling as well as other stay-in-business projects.

Growth prospects

Exploration drilling activities during 2009 focused on increasing confidence in the resource of the current operating pits. Infill drilling occurred at Star and Comet (Cut 2), Nyankanga (Cuts 5, 6, and 7), and Geita Hill. The Star and Comet resource model was updated in June 2009 with the new information adding approximately 70,000oz. The Nyankanga resource model was updated in September 2009 and confirmed the current resource. Another update of the Nyankanga resource model is scheduled for the first quarter of 2010 and will incorporate the remaining Cut 7 infill information and an update of the Geita Hill resource model.

In addition to the above, an airborne geophysics survey was undertaken in the existing areas covered by Geita’s licences and adjacent prospecting rights. A total of 41 targets were delineated. The top 10 priority aero-TEM targets were surveyed using the ground EM (Max-Min) method. The results of this initiative are pending.

Outlook

Gold production for 2010 is forecast to increase to between 339,000oz and 354,000oz at a total cash cost ranging between $849/oz and $889/oz.

Capital expenditure of $36m is planned to be spent on ensuring the integrity of the process plant and on further rationalisation of the mining fleet. Exploration expenditure of $3m is planned.

Community and environment

No major environmental incidents occurred and Geita maintained its ISO 14001 certification.

Geita was temporarily withdrawn from the Cyanide Code owing to infrastructure modifications needed to meet Code requirements. Geita will rejoin the Code as soon as possible.

Close dialogue was maintained with the local Geita community and areas of concern were addressed. The resolution of land compensation matters is progressing well.