Our strategy
Optimising the existing asset base
We aim to increase production across our existing assets through operational improvements.
Case study: Gold Plant Project at North Mara
North Mara has been undergoing a substantial optimisation programme both in the mining operations and in the process plant. Improvements in our mining fleet and practices have positioned us to be able to efficiently move increased volumes of tonnes in 2013. In tandem with this, we have invested over US$25 million into process plant infrastructure in order to improve recovery rates, something which should increase production and help to mitigate cash cost increases.
The gold plant upgrade has involved improving the grinding efficiency of the mills and adding oxygen into the circuit to improve the responsiveness of ore to cyanide leaching. We have converted two tailings thickeners into pre-leach thickeners and have also installed additional leach tanks so that ore may be exposed to cyanide for a longer time period as part of processing and treatment procedures. The increased residence time will allow for improved recoveries and a reduction of gold residue in tailings.
We expect the project to increase gold recoveries by up to 4% as a result of the combined measures. In addition to the improved recovery rates, as a part of the project we installed further cyanide detoxification capacity in line with compliance standards under the International Cyanide Code and our commitment to manage our tailings responsibly.
Progress in 2012
- Increased production levels and improvements in the grade profile at North Mara, following the access to higher grade zones in the Gokona pit in the second half of the year
- Improvements in recovery rates at North Mara, as a result of the positive impact of the gold plant upgrade
- Continued progress in mining and processing activities at Buzwagi, increasing consistency in the operational performance of this operation, particularly during the second half of the year
- Commencement of operational initiatives at Bulyanhulu to address paste fill delays, lower than planned availability of high grade stopes and lower equipment availabilities
Priorities for 2013
- Finalising and implementing our Operational Review
- Resolve paste fill plant issues, increase availability of higher grade stopes and stabilise workforce at Bulyanhulu
- Sustain increased level of mining rates and continue to operate at nameplate capacity in the process plant at Buzwagi
- Maintain increased mining rates, continue to deliver improved recoveries and progress land acquisitions and relocations at North Mara
- Harvest high grade pillars, progress discussions on closure/divestment options for Tulawaka
Expanding through near-mine projects
We pursue organic growth opportunities to expand our existing resources.
Case study: Bulyanhulu Upper East Expansion
As part of our drive to expand our assets, ABG has been examining options to increase mining rates at the Bulyanhulu mine to bring production more into line with the scale of its resource base. The acceleration of mining from the Upper East Zone is one of our key expansion projects aimed at achieving this.
Previously, the Bulyanhulu Upper East Expansion project was solely based on the 1.2 million ounces of gold reserves located in Reef 1 of the Upper East Zone. We have now completed a positive scoping study to incorporate an additional 900 thousand ounces of gold which currently sit in reserves in Reef 2 of the Upper East Zone. We have ordered certain long lead items and are now progressing with further technical studies to explore this opportunity. If these studies are successful, we should be able to progress the project so as to commence gold production from the Upper East Zone in late 2014.
The incorporation of Reef 2 significantly enhances the Bulyanhulu Upper East Expansion project, which is now expected to produce 90 thousand ounces of gold per annum once fully ramped up and will deliver life of mine production of 1.9 million ounces of gold over the next 20 years. The project is expected to require approximately US$100 million of pre-production capital, to be spent in 2013 and 2014.
Progress in 2012
- Engineering, procurement and construction contract awarded and project financing arranged for Bulyanhulu CIL Expansion project
- Expansion of the scope of the Bulyanhulu Upper East Expansion project to include Reef 2 as well as Reef 1
- Continued progress of drill programmes around the Nyabirama open pit at North Mara
- Gokona underground resource at North Mara increased to approximately 900 thousand ounces of gold
Priorities for 2013
- Substantially complete construction of Bulyanhulu CIL Expansion project
- Receive Board approval to proceed with Bulyanhulu Upper East Expansion project and continue exploration drilling to expand Reef 2 resource
- Complete feasibility study for the Gokona Expansion at North Mara
- Complete the Nyabirama resource update at North Mara
Growing through greenfield opportunities
We are committed to growing our operations in Tanzania and transforming our business into a truly pan-African player within the industry.
Case study: West Kenya Joint Venture Project
In late 2012 we acquired the entire issued share capital of Aviva Mining (Kenya) Limited (“AMKL”), the assets of which include a 51% interest in a joint venture with Lonmin plc, which may be increased to 75% subject to satisfaction of certain conditions, and a right to earn up to a 75% interest in a second joint venture with Advance Gold Corporation. Together, these joint venture arrangements provide ABG with an interest in a number of exploration licences located within the Ndori Greenstone Belt in West Kenya. This acquisition represents our first step in expanding our footprint outside of Tanzania and is an important addition to the grassroots and target delineation segments of our exploration pipeline as we look to secure medium to long-term growth and diversification of our asset base.
The Ndori Greenstone Belt is a highly prospective area and one of several greenstone belts in Kenya. It has multiple styles and types of gold prospects that are comparable to those found in the Lake Victoria Greenstone belts in Tanzania. The licences held under the Kenyan joint venture structures contain multiple large-scale gold anomalies in areas of historic colonial mines and prospects, and cover a land package in excess of 2,800 square kilometres. Sporadic, historic and current exploration activities have identified a large number of targets that justify follow-up and we intend to implement a systematic and focused gold exploration programme in 2013 and beyond.
In addition to the interests in the exploration licences and properties, the acquisition of AMKL provides ABG with a strong Kenyan based exploration team, continuity of project history and knowledge, as well as existing local and country government and ministry relationships.
Progress in 2012
- Completion of the West Kenya JV project acquisition
- Expansion of Nyanzaga in-pit resource to in excess of 4.6 million ounces of gold and successful completion of scoping study for the project
- Completion of metallurgical drilling programme to update resource model at Golden Ridge
- Progression of exploration drill programme at Dett prospect
Priorities for 2013
- Continue regional grassroots exploration across West Kenya JV project
- Advance drill testing stage targets around the Kakamega Dome Camp of the West Kenya JV Project
- Delineate potential for new discoveries around the Lake Zone Camp of the West Kenya JV Project
- Complete the pre-feasibility study for the Nyanzaga project and continue drill programmes to explore underground potential for this project