The joint partnership between AngloGold Ashanti and Independence Group (IGO) have released a pre-feasibility study which confirms that underground mining at the Tropicana gold mine is technically and financially viable. 70% of Tropicana is owned by AngloGold with its partner, IGO owning the remaining stake. This comes at a time when the gold price Australia is pushing higher.
According to studies, the Tropicana mine can be developed into an underground mine with a potential of producing up to 2.8 million grams of gold every year. Researchers estimate the mine to have an operational lifespan of up to seven years. The project would cost around $95 million to develop and would be based on open pit mining to capitalize on improvements made with the process plant delivered to the site last month after they commissioned a second ball mill.
Peter Bradford, managing director of IGO says that the study has demonstrated the viability of underground mining underneath the open pits at the Boston Shaker to improve the existing life span of the mine.
He said that the delivery of Boston Shaker underground will yield significantly higher rates of gold production from Tropicana.
There are other work programs being implemented at the Tropicana to add value, with the prefeasibility study being one of them. Peter believes that the results are encouraging and will motivate the company to push for a more complete feasibility study that could start an exciting new venture at Tropicana.
The complete feasibility study is expected to be launched at the second half of 2019 before any financial commitment is made to the development of the project. Initial portal development will begin by the mid of next year. Full production levels are expected to reach by 2021 and the final bits of mining are planned for 2026 before reaching maturation.
Gold producers are posited to grow substantially in the coming years, particularly on account of the US Federal Reserve’s shocking, yet anticipated, decision to push interest rates higher. The Australian dollar has also improved its position relative to the US Dollar, jumping above 0.7100 level.
One of the three companies that will make improvements are Dacian Gold (ASX:DCN), Westgold Resources (ASK:WGX) and Silver Lake Resources (ASX:SLR). Ore reserves at the Mount Morgans Gold Operation (MMGO) were increased by 16% to 39.7 million grams, allowing Dacian gold to increase production, giving it a 5% rally over the past two days.
For Westgold Resources, the future prospects are bright because production is expected to rise to the 300,000 to 320,000 ounces range. It has sustained a 10% rally, trading at a high 91.5 cents.
Silver Lake Resources and Doray Minerals are scheduled for a merger to become more effective at the production of gold. The proposal will be put into effect in early 2019 and has been given unanimous recommendation by boards from both companies. Silver Lake increases its gold sales by 10% and reduced costs down to 5%. Its shares have rallied more than 10% in the month of December along, perhaps owing to the upcoming merger.