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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (5667)	8/23/2007 10:44:17 AM
From: LoneClone	Read Replies (1) \| Respond to of 194771

AngloGold Seeks New El Dorado By Charlotte Mathews 22 Aug 2007 at 10:44 AM GMT-04:00 resourceinvestor.com JOHANNESBURG (Business Day) -- AngloGold Ashanti [NSYE:AU] is looking at ways to extend the potential of its low-cost mechanised mines in South America against a background of prevailing high gold prices. In the past five years gold has more than doubled, to about $660 per ounce this week from $305 per ounce in August 2002, with a recent peak of $725 per ounce in May last year. In the six months to June, the group’s mines in Argentina and Brazil contributed 11% of total group production, well behind the 43% derived from AngloGold’s South African activities and 30% from the rest of Africa. Brasil Mineração, Cerro Vanguardia (in which AngloGold holds 92.5%) and Serra Grande (in which AngloGold’s attributable share is 50%) are relatively small within the group, ranking 8th, 11th and 18th in production contribution in the six months to June. But in cash costs, the three operations ranked among the five most efficient mines in the whole group. The most economical mine, Cerro Vanguardia, had cash costs of $222 per ounce compared with $632 per ounce at AngloGold’s most expensive mine to operate, Moab Khutsong in South Africa, whose higher costs reflect a fall in gold production because it has been negotiating faults in the ore body. The need for zero fatalities within Anglo American’s [NASDAQ:AAUK] investments - it holds 42% of AngloGold - has been highlighted by new CEO Cynthia Carroll, and AngloGold’s South American operations are far safer than its South African mines. The lost time injury frequency rate in Argentina in the June quarter was 1.87 per million hours worked and at Brasil Mineração it was 1.15. At Serra Grande in Brazil, a rate of 5.84 included the mine’s first fatal accident since 1998. By comparison, lost time injury frequency rates in AngloGold’s South African mines in the June quarter ranged from 14.38 at Moab Khutsong to 41.11 at Savuka. Last month, mining at one of the Moab Khutsong shafts was halted for investigation after two miners were killed in a seismic event. For all these reasons, expansion at the South American mines looks attractive, and the group is undertaking exploration at both brownfields sites, which means expanding around existing mine infrastructure, and greenfields sites, where there is no infrastructure. This is not at the expense of South African expansion, where AngloGold is spending $364 million on capital projects this year. An obvious first step in South America would be for AngloGold to buy out the other 50% of Serra Grande that it does not own. This would give AngloGold attributable production of almost 200,000 ounces of gold a year from the mine, against 100,000 ounces at present. AngloGold’s partner’s stake has changed hands twice since the mine was developed, from Inco to TVX Gold in 1991 and from TVX Gold to Kinross [NYSE:KGC; TSX:K] in 2003. Roberto Carvalho Silva, AngloGold Ashanti chief operating officer international, said last week Serra Grande was a good asset and AngloGold had the usual pre-emptive rights to buy its partner’s stake. Whether it did so was a matter of the asking price. Similarly, AngloGold was not wedded to any assets and would sell if the right price were offered. At Cerro Vanguardia in Argentina, AngloGold is studying the viability of establishing a heap leach operation that could produce 25,000-30,000 ounces of gold a year until 2018. It is also intensifying its exploration efforts on the 512 square kilometre property on which it holds mineral rights. At Serra Grande, an open-pit mine at Minas III started operating this year and the group has started an underground conceptual study at the nearby Palmeiras ore body, based on promising results so far. At Brasil Mineração, the Cuiabá mine is being deepened to increase production eventually to 300,000 ounces a year from 190,000 ounces. The group is exploring the Lamego deposit near Cuiabá, which initially promises to contain about 520,000 ounces, as well as the potential of deposits between Lamego and Cuiabá. It is considering the viability of extending the Córrego di Sítio open-pit mine underground, where results to date suggest a total resource of 2.1 million ounces of gold. AngloGold’s greenfields exploration in South America is focused on Colombia, where it is in joint ventures.