A prefeasibility study shows AngloGold Ashanti Australia and Independence Group will be able to take their Tropicana gold mine underground.
Joint venture partners AngloGold Ashanti Australia and Independence Group (ASX:IGO) have released a prefeasibility study (PFS) for the development of an underground mine beneath the Boston Shaker pits at their Tropicana gold mine in Western Australia.
The PFS indicates that an underground mine beneath Boston Shaker would be technically and financially feasible, and could deliver 1 million tonnes per year of material grading 3.7 grams per tonne gold to produce 100,000 ounces of the metal per year over a seven-year mine life.
An estimated capital investment of AU$95 million would be required for the mine; the JV partners have now begun a feasibility study that is expected to be completed in the second half of the 2019 financial year. A financial commitment to the mine is also anticipated at that time.
“The pre-feasibility study demonstrates the potential viability of underground mining beneath the Boston Shaker open pits that integrates with the existing open pit life-of-mine. Delivery of Boston Shaker underground will result in an improved grade and gold production profile from Tropicana from FY21,” Independence Group Managing Director Peter Bradford said in a statement.
“The pre-feasibility study is one of a number of work programs implemented at Tropicana to add value. The results are extremely encouraging, and we look forward to completing the feasibility study and potentially starting another exciting chapter at Tropicana,” he continued.
The companies anticipate that the underground operation would be aligned with the open-pit design and schedule, which would take advantage of process plant improvements made in November through successfully commissioning the second ball mill.
Initial portal development within Tropicana’s completed pit is expected to start in mid-2019, with the goal of hitting full production levels by 2021. In the meantime, the company has chosen to commit to additional drilling to define ore reserves based on positive results from the PFS.
As mentioned, Tropicana is a joint venture between Independence Group (30 percent) and AngloGold Ashanti Australia, the Australasian branch of major miner AngloGold Ashanti (ASX:AGG), which holds a 70-percent stake and manages the asset.
Tropicana was discovered in 2005 after AngloGold Ashanti Australia followed up on an unexplained gold-in-soil anomaly Independence Group had recognized in public domain regional data collected in the 1990s. Production at the asset in 2013, and by 2015 Tropicana had produced its 1 millionth ounce.
Independence Group closed Thursday (December 20) up 3 percent at AU$3.78. AngloGold Ashanti ended the day up 2.6 percent at AU$3.95.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.