AngloGold Ashanti has revealed its intentions to redevelop the Obuasi gold mine in Ghana with an investment of around $500m.
The South Africa-based gold mining company has reached an accord with the Ghanaian government over the investment framework needed to convert the gold mine into a modern, productive mining operation.
Obuasi gold mine is an open-pit and underground gold mine located, 200km north west of Accra, in the Ashanti region. It was acquired by AngloGold through the merger with Ashanti Goldfields in 2004.
However, since 2014, the Obuasi gold mine was placed in limited operating phase owing to factors like declining gold prices and significant losses for a prolonged period.
The company is now looking to restart the gold mining project as a modern, productive, long-life high margin operation with the support of the Ghanaian government.
First gold from the redeveloped Obuasi mining project is likely to be drawn in the third quarter of 2019.
AngloGold Ashanti plans to undertake the redevelopment project in two phases. In the first phase, the company will work on setting up the project, mine rehabilitation and development, and also on plant and infrastructure refurbishment.
The first phase of the redevelopment project is expected to facilitate production at a rate of 2,000 tonnes per day for the first operating year.
In the second phase, AngloGold Ashanti will take up work relating to the refurbishment of the underground materials handling system, ventilation and shafts, construction of the main crusher and a tailings storage facility among others.
The second phase of the project is likely to increase the production to 4,000 tonnes per day. Eventually, the production is anticipated to ramp up to 5,000 tonnes per day, over the following three years.
AngloGold Ashanti CEO Srinivasan Venkatakrishnan said: “Redevelopment of the Obuasi mine will establish Obuasi as a world class operation rejuvenating the proud gold mining history of the Ashanti region in Ghana.
“Obuasi now has the mine and labour plan, geological understanding and social model to match its world-class, high-grade ore body. The project metrics show a high-return, long-life project that not only brings ounces to account quickly and profitably, but also offers attractive returns on our investment.”
AngloGold Ashanti said that it had undertaken a feasibility study into the redevelopment of the Ghanian gold mine. It revealed that the Obuasi ore body contains 5.8Moz of ore reserves and 34Moz in mineral resource.