Morila Gold Mine
The Morila deposit was discovered, financed and developed by Randgold Resources and in July 2000, AngloGold Ashanti purchased half of Randgold Resources Limited's stake in the mine. Randgold Resources also holds 40% and the State of Mali 20%. AngloGold Ashanti operates Morila, while the mine is managed through a joint venture between AngloGold Ashanti and Randgold Resources.
Morila was commissioned in October 2000 and in 2002 produced more than 1 000 000 ounces of gold and was rated as one of the world's best gold mines in terms of costs and production. By June 2006, a total of 18.7 million tonnes of ore had been processed at an average grade of 7.5g/t producing 4.1 million ounces. The treatment life of Morila is currently planned to continue until 2012 and gold production is forecast to reduce from 2008.
The exploration programme continues both within the joint venture mining lease and in the surrounding Randgold Resources' permits.
Project Update to 30 September 2008...
MORILA
MORILA RESULTS Quarter Quarter Quarter 9 months 9 months ended ended ended ended ended 30 Sep 30 Jun 30 Sep 30 Sep 30 Sep 2008 2008 2007 2008 2007 Mining Tonnes mined (000) 4 991 5 029 6 765 15 720 17 159 Ore tonnes mined (000) 1180 1 211 1 609 3 921 3 335 Milling Tonnes processed (000) 1 097 1 088 1 030 3 193 3 137 Head grade milled (g/t) 3.0 3.5 4.3 3.3 3.5 Recovery (%) 90.1 92.9 91.2 91.5 91.6 Ounces produced 94 016 113 746 130 568 308 762 320 625 Average price received 870 890 692 896 673 Cash operating costs* 388 344 241 354 284 Total cash costs* (US$/oz) 440 398 289 409 330 Profit from mining activity* 40 418 56 035 51 083 150 323 106 585 Attributable (40% Gold sales (US$000) 32 725 40 504 35 511 110 642 85 007 Ounces produced 37 606 45 498 52 227 123 505 128 250 Profit from mining activity* 16 167 22 414 20 433 60 129 42 634
Morila’s production in the third quarter was disappointing with total gold production of 94 016 ounces compared to the second quarter of 113 746 ounces. Total cash costs were US$440/oz compared to US$398/oz in the previous quarter. Head grade milled of 3.0g/t was considerably lower than the 3.5g/t achieved in the second quarter, constrained by the lack of flexibility in the pit as the operation nears the end of in-pit mining. Tonnes processed was better than the previous quarter and the corresponding quarter of 2007, while recoveries were lower on the back of lower grades.
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proportionately consolidated)
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* Refer to explanation of non-GAAP measures provided.
Results from the final phase of grade control have shown good continuity of ore grade under the northern base of the pit. As the strip ratio in this area is too high to access the ore from the open pit, we intend to carry out a scoping study in Q4 to establish the potential for a small underground development.
During the last quarter, the mine exceeded 5 million ounces of gold production since it commenced production in 2000. As previously indicated, Morila will shift to a stockpile retreatment operation towards the middle of next year. The mine is currently reviewing its plans for 2009 and beyond to ensure it is prepared to make the necessary adjustments when open pit mining ceases, in order to ensure that the operation remains a strong cashflow generator for the group. During the stockpile retreatment phase, costs previously deferred to the balance sheet will be expensed through the income statement as and when the stockpiles are processed. The resultant increased costs will have the benefit of reducing taxable profits, thereby enhancing the cashflow from the operation. Progress has also been made in investigating a sustainable agri-business for the benefit of the surrounding communities which could take advantage of the significant infrastructure that will remain when the mine closes, which is currently scheduled for 2013.