Australia

AngloGold Ashanti has two operations in its Australia region, Sunrise Dam and Tropicana, both of which are in the north-eastern goldfields of the state of Western Australia.

Our operations in this region are:

  • Sunrise Dam, wholly-owned by AngloGold Ashanti, is located 220km north-east of Kalgoorlie and 55km south of Laverton. Underground mining, carried out by a contract mining company, is now the primary source of ore, following the cessation of mining in the open pit in 2014.
  • Tropicana, a joint venture in which AngloGold Ashanti has a 70% holding and which it manages with 30% held by IGO Ltd, is located 200km east of Sunrise Dam and 330km east-northeast of Kalgoorlie. The operation is a large open pit operation with mining carried out by a contractor.

Operating performance

Production

The Australia region produced 614,000oz in 2019 compared to 625,000oz 2018. The 2% drop in year-on-year production was largely the result of lower underground mined volumes and grades at Sunrise Dam.

Sunrise Dam experienced operational challenges in the middle of the year with limited stope flexibility and paste fill delays, which resulted in lower underground volumes and grades. However, mining flexibility improved in the fourth quarter of 2019 as larger stopes came online, resulting in a record production from underground for the fourth quarter.

A substantial exploration programme is underway to increase Mineral Resource confidence, grow the underground Ore Reserve and support development of additional mining areas in the long term. Critical for success at Sunrise Dam is increasing flexibility to ensure consistently high underground tonnages are available to displace lower-grade surface stockpiles. Strategic drill platforms have been established to facilitate systematic exploration of the down plunge extents of the Vogue mineralised system, while also testing areas to the north and south that could generate additional work areas. The objective of the drilling is to provide data to facilitate Ore Reserve conversion and increase confidence and reliability in the two- to fiveyear planning horizon.

At Tropicana, production at 360,000oz for the year, was 7% higher year-on-year. Higher mill throughput, which set new records in December 2019, offset lower feed grades in the second half of the year and contributed to the increase in gold production. Annual tonnes mined also broke site records in 2019. The Tropicana open pit was completed during the year and mining continued in the Havana South, Havana and Boston Shaker pits. In 2020, it is planned that open pit mining will be focused on the Havana pit.

Costs

The region’s AISC was $990/oz in 2019 compared to $1,038/oz for 2018. Despite the 2% lower production delivered in the region for the year, a strong focus on operational excellence coupled with a weaker exchange rate contributed to a 4% drop in total cash costs and a 5% drop in AISC compared to 2018. Tropicana’s total cash costs declined due to higher volumes, and improved efficiencies partially offset by unfavourable grades, royalties and inflation while total cash costs at Sunrise Dam were negatively impacted by lower efficiencies, lower grade and inflation.

Operational excellence work included a successful trial of autonomous open-pit blast hole drilling, which indicated significant productivity gains could be achieved by converting all six drill rigs to autonomous operation. Autonomous operation can improve drill use by enabling their continued operation within the exclusion zone during blasting, so extending drill bit life and reducing the number of operators needed.

Capital expenditure

Total capital spend for the region was $149m in 2019 compared to $156m in 2018. Capital expenditure at Tropicana increased by $30m predominately due to the start of the Boston Shaker underground growth project at $21m. An increase in waste stripping capital expenditure due to the scheduling of open pit cutbacks was partially offset by a reduction in stay-in-business capital. Capital expenditure at Sunrise Dam reduced by $36m due to lower Ore Reserve development and stay-in-business capital expenditure. Several key infrastructure projects, such as the expansion of the tailings storage facility and the upgrade to the ventilation system were completed in 2018 resulting in a $25m year-on-year reduction in stay-in-business capital expenditure when compared to 2019.

Growth and improvement

At Sunrise Dam, the underground exploration programme initiated in the second half of 2019 is expected to take two years. The programme is designed to increase Mineral Resource confidence, grow the underground Ore Reserve and support development of additional mining areas in the long term. By the end of the year six underground diamond drill rigs were in operation testing targets including the southern strike extensions of the Midway Shear Steeps (MSS) and Elle and areas to the south of the current Vogue Indicated Mineral Resource. Surface diamond drilling will target southern extensions of Vogue.

Drilling results returned in 2019 identified extensions of Vogue mineralisation over an approximate 180m strike length; southern extensions to the Midway Shear Steeps ore domains, approximately 190m south of the current Indicated Mineral Resource; and potential repetition of the Midway Sheer Steeps ore domains, approximately 100m east of the current Indicated Mineral Resource. Drilling also intersected mineralisation 500m to the south down plunge of the Mineral Resource, suggesting the continuation of the Vogue orebody.

Development of the Boston Shaker underground mine at Tropicana began in May 2019 and at year-end the project was on track to deliver high-grade ore in mid-2020 as planned. The decision to go ahead with the project was announced in March 2019 and, after a feasibility study confirmed that underground mining was technically and financially viable, demonstrating robust economics with an anticipated internal rate of return of 39% for a capital investment of $79.3 million (100%).

Boston Shaker is expected to contribute higher-grade mill feed, resulting in an improved gold production profile and enhanced cash flow, during 2021-2023 when the mine plan includes periods of higher waste stripping in the Havana open pit.

The feasibility study was based on the mining of 6.58 million tonnes, grading 3.84g/t, assuming the systematic conversion of Mineral Resource to Ore Reserve over the life of the mine. The average underground mining rate will be approximately 1.1Mtpa (including development) over an eight-year mine life to 2026 to produce a total of 732,000oz. Mining methods will comprise conventional mechanised mining and underhand sub-level open stoping.

The two raises bore holes required for ventilation and emergency egress were tracking ahead of schedule by year end, and underground development of 1,640m was ahead of plan. Underground reverse circulation grade control drilling began in October. Recruitment of the underground workforce is in line with plan and the underground operation remains on track to deliver first gold in the second half of 2020. Operational excellence work is focused on remote bogging, the mechanical operator-controlled digging of ore from surface, and on optimising level spacing and extraction ratios.

Sustainability performance

In the Australia region, our principal sustainable development activities relate to the following material issues:

Employee safety

Safety performance improved for the Australia region in 2019, continuing a positive trend since the commissioning of Tropicana in 2013. At Tropicana, the site ended the year with a record safety performance in terms of the AIFR and the lost-time injury frequency rate (LTIFR), achieving 14 months without a lost-time injury. At Sunrise Dam, the AIFR and LTIFR both increased marginally from 2018, although the severity of injuries was minor.


Employee and community health

At Tropicana, a programme was initiated to improve health, safety and productivity outcomes by identifying and supporting people with sleep disorders. Since the start of the programme in mid-2018, there has been a 51% reduction in fatigue alarms among haul truck operators. In 2019, this project was a finalist in the Work Health and Safety Excellence Awards, organised by the government of Western Australia’s Department of Mines, Industry Regulation and Safety. See case study entitled, Tropicana implements programme to address sleep disorders in the from the <SR>.


Contributing to resilient self-sustaining communities

AngloGold Ashanti is actively involved in communities across the Western Australian goldfields, from Laverton to Kalgoorlie-Boulder and beyond, including remote Aboriginal communities such as Tjuntjuntjara. Our community projects support education, youth, community development and health programmes and local training. We also offer employment and business participation opportunities.

During 2019, AngloGold Ashanti Australia awarded a contract for ore rehandling and crusher feed at Sunrise Dam to Aboriginal contractor Carey Mining Pty Ltd, continuing a business partnership that began more than 20 years ago. Carey Mining employs 57 people on the Sunrise Dam contract.


Responsible environmental stewardship

There were no reportable incidents in 2019 at either Australian operation and both sites met all their regulatory reporting obligations during 2019.

In the first half of the year, all necessary approvals were received to enable development of the Boston Shaker underground mine at Tropicana to proceed on schedule. During the year, the Great Victoria Desert (GVD) Biodiversity Trust, established in 2013 by the Tropicana joint venture as part of the biodiversity offset approach for the Tropicana operation, had a range of projects underway in 2019. Tropicana is on the GVD’s western edge and the trust supports research and on-the-ground conservation in two of the desert’s six ecological sub-regions.

The trust funded the first Sandhill Dunnart Research and Adaptive Management Plan for the GVD, which incorporates traditional owner land management expertise. This work identified two new Sandhill Dunnart sites, recorded 52 more fauna species and increased total bird and mammal species records for the region to 172. The Sandhill Dunnart, a small carnivorous marsupial, is an endangered species. The trust supports activities to capture and apply traditional ecological knowledge and facilitate indigenous land management participation. Projects include research to increase fire-management capability and introduce traditional fire management practices, as well as traditional owner ranger training.


Navigating regulatory and political uncertainty and risk

AngloGold Ashanti drafted a whistle-blowing policy for the region, which is also aligned with group policy, to address specific requirements of the Australian Whistle-blowing Act.