Mali

Morila

Key statistics

Morila     2010 2009 2008
Pay limit  (oz/t)  0.02 0.04 0.06
(g/t)  0.67 1.21 2.17
Recovered grade*  (oz/t)  0.050 0.072 0.090
(g/t)  1.70 2.47 3.08
Gold production  – 100%  (000oz)  238 342 425
– 40%  95 137 170
Total cash costs  ($/oz)  715 527 419
Total production costs  ($/oz)  766 583 495
Capital expenditure  – 100%  ($m)  3 10 3
– 40%  1 4 1
Total number of employees  – 100%  891 1,053 1,703
Employees  476 518 605
Contractors    415 535 1,098

* Open-pit operation

Outlook for 2011 (attributable)
Production (000oz)     82 – 85
Total cash costs ($/oz)     838 – 869
Capital expenditure ($m)     1

Attributable gold production
(000oz)

Gold production (000oz) Morila

Attributable capital expenditure
($m)

Capital expenditure ($m) Morila

Total cash cost
($/oz)

Total cash cost ($/oz) Morila

Total number of employees*

Total number of employees* Morila

Description

The Morila mine is situated some 180km southeast of Bamako, the capital of Mali. The operation currently treats low-grade stockpiles. The plant at Morila, which incorporates a conventional CIL process with an upfront gravity section to extract the free gold, has an annual throughput capacity of 4.3Mtpa.

Morila is 80% owned by Morila Limited, a joint venture in which AngloGold Ashanti and Randgold Resources Limited each have a 50% stake, giving AngloGold Ashanti an effective interest of 40% in Morila. The government of Mali owns the remaining 20%. Randgold Resources manages the mine.

Operating performance

Attributable gold production declined by 31% to 95,000oz, mainly due to a 30% drop in head grade as a result of the treatment of low-grade stockpiles.

Total cash costs increased by 36% to $715/oz as a result of the lower production and higher costs for reagent and also for fuel burnt in power generation.

Morila spent stay-in-business capital of $3m in 2010, of which $1m was attributable. The major elements of this were the SAG and ball mill main gearbox, conveyor belting and the replacement of the Knelson concentrators.

Morila will continue the current process of treating low-grade ore stockpiles until 2013. Attributable production is therefore expected to decrease further as Morila reaches the end of its life.

Outlook for 2011

Attributable gold production for 2011 is projected to be in a range of 82,000oz to 85,000oz at a total cash cost of between $838/oz and $869/oz. Attributable capital expenditure is estimated at $1m.

Sustainability

Safety

The safety statistics for Morila are reported by Randgold Resources, the operator, and are not included in AngloGold Ashanti’s statistics.

Environment

No significant environmental incidents were reported during the year. ISO 14001 certification was maintained after an external assessment audit was completed during 2010. No non-conformance issues were raised.

Community

The mine maintained a good relationship with communities and regular meetings were held. All community development projects planned for the year were completed. The mine continued to provide malaria spraying services and treated five villages during 2010, through three spraying cycles.

Morila’s closure committee is operational and meets quarterly. A sustainable agribusiness project is being developed to continue wealth creation after closure of the mine, with 1,270ha having been identified for agriculture. Plans are in place to convert the bulk mining yard and the batch plant into an area for poultry farming and animal husbandry.

The micro-finance project (CAMIDE) has funded 20 undertakings for former staff members. Morila’s management and unions are formulating a social plan for employees. The ongoing closure process focuses on the social plan submitted by labour unions and the closure coordinator, as well as engagement with government agencies to provide training assistance to affected employees.

The New Mine Collective Convention was implemented in September 2010, with no major issues identified. Compulsory health insurance and the payment of the related subscription came into effect in November 2010.

Sadiola

Key Statistics

Sadiola     2010 2009 2008
Pay limit  (oz/t)  0.04 0.04 0.07
(g/t)  1.28 1.46 2.18
Recovered grade*  (oz/t)  0.060 0.074 0.100
(g/t)  2.04 2.52 3.42
Gold production  – 100%  (000oz)  287 354 453
– 41%(1) 118 135 172
Total cash costs  ($/oz)  650 488 399
Total production costs  ($/oz)  698 571 554
Capital expenditure  – 100%  ($m)  20 10 8
– 41%(1) 8 4 3
Total number of employees  – 100%  1,771 1,532 1,510
Employees  790 705 634
Contractors  981 827 876
All injury frequency rate  (per million hours worked)  1.65 2.31 4.37

* Open-pit operation
(1) Effective 29 December 2009, AngloGold Ashanti increased its interest from 38% to 41%.

Outlook for 2011 (attributable)
Production (000oz)     123 – 129
Total cash costs ($/oz)     699 – 725
Capital expenditure ($m)     23

Attributable gold production
(000oz)

Gold production (000oz) Sadiola

Attributable capital expenditure
($m)

Capital expenditure ($m) Sadiola

Total cash cost
($/oz)

Total cash cost ($/oz) Sadiola

Total number of employees*

Total number of employees* Sadiola

Description

Sadiola is situated in the far southwest of Mali, 77km south of the regional capital, Kayes. Sadiola is a joint venture in which AngloGold Ashanti and IAMGOLD each have a 41% interest and the government of Mali 18%.

Mining at Sadiola takes place in five open pits. Ore is treated and processed in a CIL gold plant with a monthly capacity of 364,000t.

Operating performance

Attributable production decreased by 13% to 118,000oz, from 135,000oz in 2009, mainly as a result of a 12% decline in head grade.

The decline in grade is as a result of the depletion of the Sadiola main pit Ore Reserves and a change in the mining focus to the lower-grade satellite pits.

A new gravity circuit was introduced in the plant and aided recovery in the processing of oxide and sulphide feed materials. Advance crushing and screening of both ore types significantly improved plant throughput in the latter part of the year by minimising the introduction of large rocks and associated blockages early in the process.

Total cash costs increased by 33% to $650/oz, owing mainly to the lower-grade feed supplied to the priority plant. In addition, mining contractor costs were higher as a result of the longer haulage distance, higher maintenance costs and increases in the fuel price.

The BPF component of the Project ONE initiative was introduced during 2010 and is expected to be fully entrenched during 2011. Initial BPF work will be directed at optimising processing activities so as to increase availability, utilisation and throughput of the plant.

Total capital expenditure for the year was $20m ($8m attributable). Of the total, $10m was spent on projects, $7m was stay-in-business capital and $3m was spent on exploration projects.

Growth prospects

Sadiola is currently investigating two expansion opportunities, namely the Deep Sulphide project, which is in feasibility stage, and the Oxide Expansion project, which is currently undergoing a prefeasibility study.

The Deep Sulphide project will treat both oxide (5Mt per year) and sulphide (3.6Mt per year) ores. Initial waste stripping at Sadiola’s main pit and the commissioning of the sulphide plant is expected to commence in 2012. Once current oxide Ore Reserves are depleted, the plant will be modified to treat only sulphide material at a capacity of 7.2Mt per year. The Deep Sulphide project will extend the mine’s life and add 4.2Moz to Sadiola’s current life of mine production profile. The feasibility study is expected to be completed early in 2011.

The oxide expansion project is based on exploration results that indicate additional oxide potential in the Sadiola area. Current work includes expediting the exploration programme to better define the potential of all existing targets and profile new target areas.

Outlook for 2011

Attributable production is expected to be between 123,000oz and 129,000oz. The increase will be mainly driven by improved throughput following the introduction of the new screening plant.

Total cash costs are expected to increase to between $699/oz and $725/oz.

Capital expenditure of $54m ($23m attributable) is planned.

Sustainability

Safety

Sadiola had one fatality in August 2010. Whilst positioning a submersible de-watering pump, the supervisor fell into a temporary sump following the collapse of the area. All the recommendations arising from the investigation into the incident have been implemented. The all injury frequency rate for the year improved to 1.65 per million hours worked (2009: 2.31).

As contractor-related incidents were the major source of injury, contractor management received concerted attention to ensure alignment and compliance with AngloGold Ashanti’s standards and practices.

Other safety-related programmes and initiatives are directed at pre-work planning, hazard analysis, vehicle safety and training focused on crisis and emergency plans.

The mine maintained its OHSAS 18001 certification in 2010.

Community (including Yatela)*

Annual workshops comprising government, national and regional authorities, local communities, media, Non- Governmental Organisations (NGOs) and other associations have been held since 2003. These workshops provide a forum to communicate the activities planned by Sadiola and Yatela, while providing an opportunity for the relevant stakeholders to comment and make recommendations.

The Integrated Development Action Plan (IDAP) has been in place since 2004. Covering villages located around the Sadiola and Yatela mines, it focuses on agricultural capacity-building and micro-financing activities. The plan is managed by the communities themselves and includes a general assembly with representatives from each village. The IDAP has received funding from Sadiola and Yatela which enables it to function successfully and independently.

Community members from the villages surrounding Sadiola and Yatela have been trained in malaria mitigating techniques, which has aided a decline in the incidence of the illness since the implementation of the programme in 2005.

It is the responsibility of both Sadiola and Yatela to contribute to an HIV/AIDS programme. Initiatives focus specifically on awareness, testing and peer educators in the workplace. The company partnered with NGOs during the soccer World Cup 2010 to attract villagers to central locations to watch games and participate in voluntary testing.

* Given their proximity to each other, Sadiola and Yatela conduct their local community initiatives jointly.

Environment

One reportable environmental incident occurred on 26 April 2010 when the incorrect disposal of 75 litres of a pesticide into drains led to contamination of the final effluent from the sewage treatment plant, resulting in the death of more than 200 birds. This incident resulted in a fine levied by local authorities. Management implemented measures to prevent a repeat of the incident by including regular inspections of the site and the education of employees on the importance of adhering to the correct disposal procedures.

The environmental impact assessment for the Sekokoto road diversion was completed and approved by government. ISO 14001 certification was maintained following an external surveillance audit.

Yatela

Key statistics

Yatela     2010 2009 2008
Pay limit  (oz/t)  0.01 0.04 0.04
(g/t)  0.45 1.52 1.34
Recovered grade*  (oz/t)  0.036 0.106 0.078
(g/t)  1.23 3.62 2.66
Gold production  – 100%  (000oz)  150 222 165
– 40%  60 89 66
Total cash costs  ($/oz)  807 368 572
Total production costs  ($/oz)  883 455 591
Capital expenditure  – 100%  ($m)  5 2 8
– 40%  2 1 3
Total number of employees  – 100%  878 803 888
Employees  308 298 305
Contractors  570 505 583
All injury frequency rate  (per million hours worked)  2.28 5.54 6.13

* Open-pit operation

Outlook for 2011 (attributable)
Production (000oz)     31 – 32
Total cash costs ($/oz)   977 – 1,014
Capital expenditure ($m)     1

Attributable gold production
(000oz)

Gold production (000oz) Yatela

Attributable capital expenditure
($m)

Capital expenditure ($m) Yatela

Total cash cost
($/oz)

Total cash cost ($/oz) Yatela

Total number of employees*

Total number of employees* Yatela

Description

The Yatela mine is situated some 25km north of Sadiola and approximately 50km south-southwest of Kayes. Ore extraction is conducted from the Yatela main pit as well as the satellite pit at Alamoutala. The ore mined is treated at a heap-leach pad together with carbon loading. The carbon is then eluted and the gold smelted at nearby Sadiola.

Yatela is 80% owned by the Sadiola Exploration Company Limited, a joint venture in which AngloGold Ashanti and IAMGOLD each have an interest of 50%, giving AngloGold Ashanti an effective stake of 40% in Yatela. The government of Mali owns the remaining 20% stake in the mine.

Operating performance

Yatela was originally scheduled for closure in 2010, though the life has since been extended. Attributable gold production at Yatela dropped by 33% from 2009 levels to 60,000oz in 2010. The decline in production was due mainly to a decrease in the head grade of the ore stacked as a result of non-conformity at the bottom of mineralised structures in Alamoutala.

Total cash costs increased by 119% to $807/oz, due to the significant decrease in production coupled with higher stripping costs to access the Alamoutala ore and an increase in contract mining costs.

Capital expenditure for the year of $6m ($2m attributable) was spent mostly on exploration $4m and stay-in-business capital $2m to support the extended mine life.

Growth prospects

The current life of mine is based on the successful conversion of the Inferred Mineral Resource in Yatela North, where the opportunity lies in the northeast and northwest extensions. Furthermore, a focused exploration programme will be undertaken over the next year to ensure continuation of the mining operation.

Outlook for 2011

Attributable production at Yatela is projected to be between 31,000oz and 32,000oz for the year at a total cash cost of between $977/oz and $1,014/oz. Capital expenditure of $2m ($1m attributable) is planned.

Sustainability

Safety

The all injury frequency rate for the year improved to 2.28 per million hours worked (2009: 5.54).

Programmes which enabled this improvement included pre-work planning, hazard analysis and also vehicle safety and training directed at crisis and emergency plans.

Management identified effective contractor management as a key area for safety improvement and contractor alignment with group safety standards as a priority.

The mine maintained its OHSAS 18001 certification in 2010.

Community

See Sadiola.

Environment

There were no reportable environmental incidents at Yatela during 2010. This was as a result of increased inspection and regular interaction with site personnel and management on accident prevention.

The mine rehabilitated 19.5ha of waste dumps and heap leach pads during the year. The rehabilitation of a further 160ha has been built into the current business plan and will be accelerated.

Furthermore, a closure manager has been appointed by Yatela to ensure that all requirements are fulfilled. The closed Obotan mine in Ghana was visited jointly with the National Closure Commission to better understand closure-related issues and help in the development of a formal closure plan for Yatela that considers the physical environment, social issues and worker development.

ISO 14001 recertification of Yatela was achieved following an audit. An external surveillance audit will be undertaken in 2011.

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