Australasia

Podcast

Graham Ehm

Graham Ehm

Executive Vice President – Australasia Listen to podcast
Solid operational performance Map: Australasia

AngloGold Ashanti’s sole operating mine in Australasia is Sunrise Dam.

Production from Australasia declined by 1% to 396,000oz in 2010, equivalent to 8.8% of group production. Total cash costs increased by 48% to $982/oz, whilst in local currency, total cash costs rose 29% to A$1,070/oz, due primarily to the increase in the unwinding of deferred stripping costs. In all, 494 people, including contractors were employed, 39 more than in 2009. Total attributable capital expenditure for the region, including Tropicana, was $40m, a decrease of 77% on the $177m spent in 2009, which included the Boddington project that was sold. The bulk of this was spent on Ore Reserve development at Sunrise Dam and at Tropicana.

The group is also developing the new Tropicana gold mine in Western Australia, along with joint venture partner Independence Group Ltd. (30%). Tropicana, a greenfield discovery made by AngloGold Ashanti, is expected to deliver its first production in 2013. AngloGold Ashanti is managing the project along with a vast exploration programme in the area that covers some 13,500km2 of tenements along a 600km strike length, considered one of the most prospective regions for new gold discoveries in Australia.

The Mineral Resource for Australasia, attributable to AngloGold Ashanti, totalled 7.05Moz at year-end, including an attributable Ore Reserve of 3.74Moz.

Exploration in the Australasia region was conducted in the Cornelia Range, in Western Australia, and in the Solomon Islands. For further information on the group’s exploration programme in Australasia, see Global exploration.

Contribution to group production

Contribution to group production

Australia – Sunrise Dam

Key statistics

Sunrise Dam   2010 2009 2008
Pay limit  (oz/t)  0.14 0.08 0.09
(g/t)  4.32 2.45 2.79
Recovered grade*  (oz/t)  0.094 0.084 0.101
(g/t)  3.22 2.87 3.46
Gold production  (000oz)  396 401 433
Total cash costs  ($/oz)  957 646 531
Total production costs  ($/oz)  1,038 751 635
Capital expenditure  ($m)  29 31 19
Total number of employees  494 455 410
Employees  93 99 77
Contractors  401 356 333
All injury frequency rate  (per million hours worked)  13.65 8.94 15.85

* Open-pit operation

Outlook for 2011
Production (000oz)     344 – 360
Total cash costs ($/oz)     852 – 883
Capital expenditure ($m)     34

Gold production
(000oz)

Gold production (000oz) Sunrise Dam

Capital expenditure
($m)

Capital expenditure ($m) Sunrise Dam

Total cash cost
($/oz)

Total cash cost ($/oz) Sunrise Dam

Total number of employees*

Total number of employees* Sunrise Dam

Description

The Sunrise Dam gold mine is located in the northern goldfields of Western Australia, 220km northeast of Kalgoorlie and 55km south of Laverton.

The mine consists of a large open pit which is now in its fourteenth year of operation, and an underground mine which began in 2004. Mining is conducted by contractors and the ore is treated in a conventional gravity and CIL processing plant, which is owner-managed.

Operating performance

Production in 2010 decreased by 1% to 396,000oz, from 401,000oz the previous year. This was equivalent to 9% of group gold production. The decline reflects the marginally lower average grade of ore processed as anticipated in the mine plan. Open-pit mining continued in the North Wall Cutback providing over 80% of production. Ore continued to be sourced from a combination of underground and open pit operations with the use of lower-grade stockpiles to supplement the ore feed to the plant.

Underground tonnage decreased by 12%, or 94,000t, to 686,000t. Underground ore yielded approximately 75,000oz, contributing 19% to total mine production compared with 28%, or 111,000oz, the previous year.

Total cash costs increased by 48% to $957/oz, from $646/oz in 2009. In local currency terms, costs rose by 29% to A$1,043/oz. The higher costs were in line with expectations and primarily due to the accounting effects of deferred stripping costs of A$285/oz. Deferred stripping costs for the open-pit will continue to impact upon cash costs until the end of 2013. The lower production base also placed upward pressure on unit costs.

Capital expenditure for the year was $29m (A$30m), a decrease of 6% on the previous year. Stay-in-business capital increased by 86% to $13m (A$14m), due to the completion of planned projects relating to asset integrity, the paste fill plant and power upgrades. Ore Reserve development expenditure was $16m (A$16m).

Growth prospects

The North Wall Cutback will continue to supply ore to the plant until the second half of 2012, which is a year longer than originally planned. Ore from the cutback will be blended with ore from stockpiles and from the underground mine.

The contribution from the underground mine is planned to increase substantially in 2011. As a result, a paste fill plant has been constructed to enable larger orebodies to be fully extracted. Continued exploration and advances in geological understanding have also resulted in further growth of underground Mineral Resources.

Underground Ore Reserves decreased to 0.85Moz after depletion. Due to the time required to convert Mineral Resources to Ore Reserves, it is anticipated that Ore Reserves will increase significantly in 2011. The underground Mineral Resource at year-end was 2.39Moz. The mine’s total Ore Reserve at year-end was 1.38Moz and the total Mineral Resource 3.35Moz. Both figures account for depletion.

Outlook for 2011

Gold production in 2011 is projected at between 344,000oz and 360,000oz, with more than 200,000oz sourced from underground.

Total cash costs are forecast to decline to between $852/oz (A$845/oz) and $883/oz (A$885/oz), as a result of the reduction in the impact of deferred stripping costs. Capital expenditure is anticipated to be $34m (A$36m), with Ore Reserve development expenditure of $18m (A$19m) and stay-in-business expenditure of $16m (A$17m).

Sustainability

Sunrise Dam maintained its OHSAS 18001 and ISO 14001 certification. Recertification with the International Cyanide Code was approved by the ICMI.

Safety

Safety performance at Sunrise Dam reached a plateau during 2010 with an all injury frequency rate of 13.65 per million hours worked (2009: 8.94). There were no fatalities during the year.

Training in hazard identification and risk assessment was the focus at Sunrise Dam over the course of 2010. In addition, training aimed at providing an open, transparent culture of safety and safety systems, was undertaken in: risk management; values-based safety leadership; role clarity and personal accountability, open, transparent and learning safety culture; and safety systems.

In May, the Sunrise Dam team won the 2010 Chamber of Minerals and Energy Surface Emergency Response competition for the second year in a row. In addition, the Emergency Response Team went on to win the Underground Emergency Response competition in November.

Community

Sunrise Dam continues to support the Laverton community through its involvement with the Laverton Mining Liaison Committee and Shire Council. AngloGold Ashanti also has representation on the Laverton Leonora Cross Cultural Association (LLCCA) and contributes to the Mt Margaret Mission and Laverton School lunch programmes. An Indigenous People’s Engagement strategy is being progressed by the company’s cross functional team with support from an external representative.

Environment

A mine closure plan is in place and progressive rehabilitation in line with this plan is being undertaken. Governance reporting for Energy Efficiency Opportunity, National Greenhouse and Energy Reporting, and National Pollutant Inventory is being maintained and is in compliance with government regulations.

No reportable environmental incidents took place in 2010.

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