AngloGold Ashanti reported in late January 2013 that the Tropicana gold project located 330 km east-northeast of Kalgoorlie, Western Australia was on schedule to begin production during the fourth quarter of 2013. Construction was 55.6% complete at year-end 2012. Engineering design and procurement activities were complete, and all major equipment items had been delivered to the site.

The Tropicana project is a joint venture between AngloGold Ashanti (70%) and Independence Group NL (30%). Project construction was approved in November 2010. Since that time Tropicana’s mineral resource has grown by 2.8 million oz to 7.9 million oz, and the potential for extensions to the known ore zones and the discovery of additional ore within trucking distance of the processing plant remains high.

Tropicana gold production in its first three years of operation is planned at 470,000 to 490,000 oz/y at cash costs of between A$590/oz and A$630/oz, compared to a forecast of A$580/oz to A$600/oz at approval. The increase is largely due to higher fuel prices.

At approval, Tropicana had a life of 10 years. Exploration success has extended this to more than 11 years. Life-of-mine production has increased slightly to 3.6 million oz from 3.45 million oz at approval, while cash costs remain in the original range of A$710/oz to A$730/oz. Life-of-mine production is expected to increase as more of the mineral resources are converted into ore reserves.

Capital expenditure to complete the project is now estimated at between A$820 million and A$845 million, about 11% higher than the estimate at the time of project approval.

AngloGold Ashanti CEO Mark Cutifani said, “The West Australian construction market is overheated, and this, along with extreme skills shortages, has impacted labor productivity and subsequently costs.

“Progress to date has confirmed our confidence in the strength of Tropicana, and exploration continues to deliver the upside we believed was present at approval. Pre-commissioning will begin in the third quarter, leading to the commencement of production and production ramp-up in the fourth quarter.”

Mining at Tropicana is based on conventional drill-and-blast, truck-and-excavator, open-cut mining methods carried out by mining contractor Macmahon Holdings. The 5.8-million-mt/y process plant is designed for water and energy efficiency, with the comminution circuit comprising two-stage crushing, high-pressure grinding rolls, and ball milling, followed by a carbon-in-leach circuit for gold recovery.

The Tropicana joint-venture partners have approved an exploration budget of A$20 million for near-mine and regional exploration in 2013.