AngloGold to pour first gold at Obuasi mine by year end

South Africa’s AngloGold Ashanti (NYSE:AU) (JSE:ANG), the world’s third-largest producer of the metal, has completed the first week of underground development blasting at its Obuasi mine, in Ghana, as part of a redevelopment project that aims at having the operation pour first gold by the end of the year.

The first blast, on February 1, advanced development by around 4.2 metres on the 2,700 level, which is accessed through the Obuasi Deeps decline from surface and is just over 700 metres vertically below the decline portal, the company said.

Obuasi has reserves of 5.8 million ounces and is expected to produce between 350,000 ounces and 450,000 ounces of gold annually during the first ten years.

Benching and a number of additional face blasts have taken place since, with more than 14 metres of advance recorded, it noted.

“The first blast was a significant milestone in transforming this important mine into a modern, productive operation,” Chief Executive Officer, Kelvin Dushnisky, said in the statement. Our investment in Obuasi gold mine’s redevelopment will ultimately make this a key asset for Ghana, and for AngloGold Ashanti’s portfolio, for the long term.”

The Johannesburg-based company announced last year it had received the necessary permits to reopen Obuasi, which had been halted since late 2014 due to substantial financial losses. The gold miner was working on plans to redesign the mine when it was overrun by informal miners in 2016, forcing it to evacuate employees.

AngloGold was able to clear the site and committed to spend between $495 million and $545 million over the first two years in order to redevelop, which resumed operations last month.

According to the company, Obuasi has reserves of 5.8 million ounces and will operate at costs lower than AngloGold’s current average. Annual gold output will average 350,000 ounces to 450,000 ounces during the first ten years.

Higher grades in the second decade of operation will see production improve further.

Obuasi remains on track to produce its first gold by the end of 2019, with ramp-up expected during 2020.

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