Name of the Project
Obuasi gold mine redevelopment.

Location
In the Ashanti region of Ghana.

Project Owner/s
AngloGold Ashanti.

Project Description
Obuasi has been in a limited operating phase since 2014. The project aims to redevelop the mine into a modern, productive, long-life and high-margin operation. The mine has mineral reserves of 5.8-million ounces and mineral resources of 34-million ounces. The redevelopment will establish Obuasi as a mechanised underground mining operation.

The approach to redevelopment will be fundamentally different from how the mine was operated in the past. The mine will use automation and controls for improved operational efficiencies and consistent performance.

The project will be undertaken in two phases.

Phase 1 involves the establishment, mine rehabilitation and development, as well as plant and infrastructure refurbishment, to allow for production at 2 000 t/d for the first operating year. This is expected to take about 18 months.

The second phase includes the refurbishment of the underground materials handling system, shafts and ventilation; and construction of the primary crusher, the semiautogenous/ball circuit, carbon regeneration, a new gold room and tailings storage facility. This is expected to take a further 12 months and enable the operation to be increased to 4 000 t/d. The operation is then expected to ramp up to 5 000 t/d over the following three years.

Production for the first ten years will be focused on the upper orebodies and is expected to be 350 000 oz to 400 000 oz at an average head grade of 8.1 g/t.

In the following ten years, production will average 400 000 oz to 450 000 oz.

Potential Job Creation
About 3 500 people have been employed directly by the company and through contractors during the construction period. About 96% of employees are from Ghana, with three-quarters of them from the local Obuasi region.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Initial project capital expenditure (capex) of between $450-million and $500-million, excluding preproduction capital of $64-million, is expected in the first two-and-half years.

After the completion of Phase 2, extended project capex of $94-million is expected to continue until Year 6, covering the development of the Obuasi Deeps decline to the lower level of the mine, the refurbishment of the Kwesi Mensah shaft, the installation of new underground pumpstations and the construction of the flotation tailings storage facility.

Planned Start/End Date
Not stated.

Latest Developments
Gold miner AngloGold Ashanti has revised its capital expenditure (capex) guidance upward for the full-year to between $1.03-billion and $1.19-billion, from the previous guidance of $990-million to $1.14-billion.

The company, in its results presentation for the six months ended June 30, mentioned that more capital will be required with regard to the Obuasi project – at least $35-million in sustaining capital and at least $70-million in nonsustaining capex.

The company reports that Phase 2 of the Obuasi project has been substantially completed. The ramp-up from 2 000 t/d to 4 000 t/d of ore mined and processed has been delayed by the suspension of underground mining activities following a sill pillar failure incident that resulted in a fatality on May 18. The delay will allow for the investigation and third-party review of the mine plan, schedule and ground management plan.

Resumption of production will be determined following the completion and outcome of this review.

AngloGold group planning and technical executive VP Graham Ehm has said spending has been reduced as much as possible to limit the carrying cost of the project during this review period, without further impacting on the project, capital development or preparations to resume mining.

Phase 3 of the project, which relates principally to extended capex to refurbish existing infrastructure around the KMS Shaft, and service the mine as production areas progress deeper, has started. In addition, nonsustaining and sustaining capital expenditure development will also continue as the company works to make up development delays caused by Covid-19, and the consequent lack of skilled personnel at site.

Key Contracts, Suppliers and Consultants
Underground Mining Alliance, a joint venture between African Underground Mining Services and Rocksure International (mining services contract).

Contact Details for Project Information
AngloGold Ashanti media and investors, Stewart Bailey, tel +27 11 637 6031 or email sbailey@anglogoldashanti.com.