Argentina
Cerro Vanguardia
Key statistics
| Cerro Vanguardia | 2010 | 2009 | 2008 | ||
|---|---|---|---|---|---|
| Pay limit | (oz/t) | 0.13 | 0.15 | 0.22 | |
| (g/t) | 4.36 | 5.02 | 7.50 | ||
| Recovered grade | (oz/t) | 0.178 | 0.190 | 0.159 | |
| (g/t) | 6.11 | 6.51 | 5.44 | ||
| Gold production | – 100% | (000oz) | 209 | 208 | 166 |
| – 92.5% | 194 | 192 | 154 | ||
| Silver production | – 100% | (Moz) | 2.8 | 2.2 | 1.7 |
| – 92.5% | 2.6 | 2.0 | 1.6 | ||
| Total cash costs | ($/oz) | 366 | 355 | 608 | |
| Total production costs | ($/oz) | 517 | 487 | 757 | |
| Capital expenditure | – 100% | ($m) | 41 | 18 | 16 |
| – 92.5% | 38 | 17 | 15 | ||
| Total number of employees | 1,242 | 1,069 | 1,072 | ||
| Employees | 883 | 753 | 756 | ||
| Contractors | 359 | 316 | 316 | ||
| All injury frequency rate | (per million hours worked) | 8.08 | 9.34 | 9.72 |
| Outlook for 2011 (attributable) | ||||
|---|---|---|---|---|
| Production | (000oz) | 190 – 198 | ||
| Total cash costs | ($/oz) | 536 – 556 | ||
| Capital expenditure | ($m) | 61 |
Attributable gold production
(000oz)
Attributable capital expenditure
($m)
Total cash cost
($/oz)
Total number of employees*
Description
AngloGold Ashanti has a 92.5% interest in Cerro Vanguardia with Fomicruz (the province of Santa Cruz) owning the remaining 7.5%. Located to the northwest of Puerto San Julian in the province of Santa Cruz, Cerro Vanguardia consists of multiple small open pits with high stripping ratios. The orebodies comprise a series of hydrothermal vein deposits containing gold and large quantities of silver, which is mined as a by-product.
Ore is processed at the metallurgical plant which has a capacity of 3,000t per day and includes a cyanide recovery facility. Technology at the plant is based on a conventional leaching process in tanks and carbon-in-leach with a tailings dam incorporated in a closed circuit. The final recovery of gold and silver is achieved through a Merryl Crowe method with metallic zinc.
Operating performance
Attributable gold production of 194,000oz was marginally up on the previous year. The mine’s production strategy focused on ensuring 100% supply of plant feed.
Cerro Vanguardia was the group’s lowest cost producer in 2010.
Cash costs of $366/oz were 3% higher than the $355/oz in 2009, chiefly reflecting increased labour costs and the impact of local inflationary pressures. Higher spot prices and increased royalties also contributed to the higher costs but were partially offset by higher silver credits. The stockpile movement was favourable as a consequence of higher ore tonnes mined compared with last year.
Capital expenditure of $41m (attributable $38m) included $21m for stay-in-business activities and $20m for expansion projects. Capital expenditure focused primarily on underground development, heap leach construction and exploration activities, all of which will have a beneficial impact on Cerro Vanguardia’s life and add ounces to the operation’s production profile.
Growth prospects
The 2010 brownfield exploration programme added vein Mineral Resources of 0.45Moz of gold and 10.4Moz of silver.
The underground mine project was launched in July. Underground development excavation reached 3,800m at the end of 2010. Three mine portals were opened in Mangas Norte, Osvaldo CB4 and Osvaldo CB9.
The implementation of the heap leach project will enable Cerro Vanguardia’s annual gold production to increase by 20,000oz, maintaining total production at around 200,000oz by enabling the processing of low-grade material. Cerro Vanguardia’s marginal-grade ores, below the cut-off grade of the current plant process, range from 0.35g/t to 1.5g/t. Project implementation will start in mid 2011.
The 2011 exploration programme is based on 31,000m of diamond drillholes and 17,000m of reverse circulation holes. The programme aims to expand the mine’s Mineral Resource at depth and to the north and west of the concession.
The 2011 budget allocated to brownfield exploration is $9m.
Outlook for 2011
Attributable gold production for 2011 is projected to be between 190,000oz and 198,000oz. Additionally, underground operations will maintain their share of the mine’s production. Total cash costs are expected to increase to between $536/oz and $556/oz, due mainly to rising inflation expected in Argentina, lower grades from open pit operations, as well as higher unit costs from the heap leach and underground. Capital expenditure is forecast at $66m ($61m attributable) for 2011 and includes $25m for the heap leach project implementation.
Sustainability
Cerro Vanguardia’s sustainability programme aims primarily to implement the Safety Transformation programme in order to eliminate lost-time incidents.
Safety
Cerro Vanguardia’s safety performance improved during the year under review. For the eighth consecutive year no fatalities were recorded, while the all injury frequency rate improved to 8.08 per million hours worked (2009: 9.34), the best performance ever for the mine.
The Safety Transformation Programme is to be implemented during the first quarter of 2011.
Cerro Vanguardia’s brigade members received theoretical and practical training on underground mining rescue procedures at a training course in Copiapo, Chile.
Community
The Development Agency is one of the major programmes the mine shares with the local community of Puerto San Julian. This year it was agreed that the funds to sponsor these activities will be revised in line with the mine’s profitability. The application of these funds will be agreed between the Development Agency representatives, the mayor and a representative from the mine.
Environment
All of Cerro Vanguardia’s environmental initiatives and ISO 14001 certification were maintained. One reportable environmental incident took place during 2010. An excavator ruptured a buried tailings pipeline, spilling 10m3 of tailings containing cyanide solution. The spillage was cleaned up and measures implemented to prevent a recurrence.
Cerro Vanguardia will apply for Cyanide Code certification during the first half of 2011.