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Kibali development project

The Kibali gold project is a gold exploration property which covers an area of approximately 1 836 km2 in the north east of the Democratic Republic of Congo.

The Kibali project (Kibali) is located in the Orientale province of north eastern DRC, some 560 kilometres north east of the city of Kisangani and 150 kilometres west of the Ugandan border town of Arua. It is owned 90% by the Randgold and AngloGold Ashanti joint venture and 10% by société des Mines d'Or de Kilo-Moto (sokimo). Consequently Randgold and AngloGold Ashanti each effectively own 45% of Kibali. Randgold is the manager of the project.

Kibali is located within the Kilo-Moto greenstone belt, which is comprised of the Archean Kibalian (Upper and lower) volcano-sedimentary rocks and ironstone-chert horizons that have been metamorphosed to greenschist facies. The stratigraphy consists of a volcano-sedimentary sequence comprising fine-grained sedimentary rocks, several varieties of pyroclastic rocks, basaltic flow rocks, mafic- intermediate intrusions (dykes and sills) and intermediate- felsic intrusive rocks (stocks, dykes and sills). The majority of gold mineralisation identified to date is disseminated style, hosted within a sequence of coarse volcaniclastic and sedimentary rocks. The mineralisation is associated with quartz-carbonate alteration and pyrite.

ACHIEVED IN 2010

  • Updated feasibility study based on enlarged project scope
  • Road between Aru and Doko and Aru and Arua completed
  • Re-established supply chain route
  • Started Public Participation Process and initiated Resettlement Action Programme
  • Began engineering a hydropower solution and obtained two hydropower licences
  • Cessation of all illegal mining activities on site
  • Drained the two Durba lakes for site establishment

TARGETED FOR 2011

  • Start construction by mid-year
  • Establish a brick making facility for full construction programme
  • Complete Public Participation Process of Resettlement Action Programme
  • Complete construction of Catholic Church on host site
  • Complete optimised feasibility study
  • Commence RAP construction programme
  • Complete detail design studies of first hydropower facility

 

See comments and US disclaimer under Annual Reserve and Resource Declaration

Progress

All key pre-production targets set for 2010 have been met by the Kibali development team and the project is on track for the start-up of construction by the middle of 2011, six months earlier than originally scheduled.

The implementation of the RAP is already underway, with the acquisition from the state of the site for a new town, to be known as Kokiza, as well as farmland. Model homes have been built and the process of house selection by each of the families involved has started. The company and its partners continue to work with the local community to alleviate the loss of income derived from illegal informal mining, which has been ended on the site. Alternative work programmes have already been created and these include the production of basic building materials to be used for the construction of the RAP houses as well as the mine. Progress on other fronts includes the substantial upgrading of the regional infrastructure through the completion ahead of schedule of the roads between Aru/Doko, Nzoro and Aru/Arriwara - the latter being a contribution towards the president's priority fund aimed at improving infrastructure. The completion of these roads has already directly benefited the local communities by improving the availability of basic goods and therefore significantly cutting their cost of living. The Aru/Doko road is particularly significant as it links Kibali with international ports.


Feasibility

An update to the feasibility study along with an updated financial model was generated based on a new integrated mining plan including a multi open pit and underground schedule. The study will now go through a process of further internal and external review and optimisation of the mining and processing rates, capital estimate scheduling ahead of final design and approval which is targeted for mid 2011. The revised open pit and underground mining designs and schedules support a 4 million tonnes per annum operation over an estimated 19 year mine life. Updated processing costs and G&A costs have been generated based on the larger plant throughput. A full flotation plant is expected to be commissioned on plant start-up, planned for late 2013. Full flotation and flash flotation circuits will be incorporated due to an overall increase in gold recovery. Carbon in Leach treatment of the flotation tailings stream will be utilised as this significantly enhances the overall process recovery. During the update of the feasibility an opportunity for a larger project of 6 million tonne throughput was also identified, due to the large build up in ore stockpiles. As the feasibility update continues, more work will be done to optimise the project for the benefit of all stakeholders.

The underground mine design was completed by SRK Perth and consists of an initial single decline that accesses the ore beneath the KCD pit and then connects with a vertical shaft ore hoisting system to exploit the high tonnage stopes of the 5 000 lode and deeper 9 000 lodes. A trade off investigation points towards a blind sink of the vertical shaft being the preferred method, thus divorcing the capital sink from the operating mine as opposed to a drill and ream method of shaft sinking which would intrinsically link the decline development to the shaft progress. RSV Perth has been awarded the feasibility study for the shaft, which is targeted for completion in May 2011, pending the completion of geotechnical drilling.

The updated study, which is based only on existing reserves, currently anticipates:

  • Total open pit ore mined of 37 million tonnes, containing 3.2 million ounces of gold at a strip ratio of 3.8:1, to give total tonnes mined of 141 million tonnes
  • Total underground ore mined of 37 million tonnes, containing 6.8 million ounces of gold
  • Open pit mining costs average Us$3.40 per tonne over the life of Mine 
  • Underground mining costs of between Us$31 and Us$34 per tonne
  • Mill throughput of 4 million tonnes per year
  • Plant costs average Us$11.79 per tonne 
  • G&A cost is Us$4.43 per tonne over life of Mine, including outside engineering costs 
  • Life of Mine capital cost, including 2010 expenditure, is Us$1.4 billion including site construction, plant, hydropower installations, preproduction and ongoing capital
  • Recoveries (metallurgical)
    • average open pit recoveries of 83% 
    • average underground recoveries of 91%.

The financial model, carried out using a US$1 000/oz gold price, gave the following returns and cash costs of production:

Development

The first six months of 2011 will be dominated by the completion of the detailed costing and designs for the underground operation, shaft complex and detailed Tailings Storage Facility design and the costing to optimise the feasibility. Hydropower technical feasibility and environmental and social impact assessment studies are to be completed. This will be coupled with the start of pre-construction and establishment of the construction camp and brick making facilities. Advanced grade control drilling on the KCD pit is planned for the third quarter of 2011 in preparation of mining works. The physical implementation of the RAP will start with the construction of the first houses in February 2011. The programme is expected to take 24 months to complete.

Specification of long lead time items will be completed in the second quarter to enable finalisation of tender bids for the start of the construction phase for underground, surface operations and hydropower projects at the beginning of the third quarter of 2011.

Exploration

The exploration team completed a detailed analysis of the KCD deposit, resulting in a new geological model which supported a growth in reserves from 4.5 million ounces at acquisition to 10.05 million ounces at the end of December 2010. Continuity of mineralisation was confirmed between the Sessengue and KCD deposits and remains open down plunge. This will be tested by a programme of deep drilling in 2011.

An airborne electromagnetic survey was flown over the permit holding. Three-dimensional modelling and the integration of additional geological datasets has prioritised targets for drilling in 2011. For more information on exploration during 2010 please refer to the exploration section of this report.