Due to the completion of a pre-feasibility study in late 2018, the two companies said their Tropicana gold mine showed enormous potential with the proposed development of an underground mine beneath its Boston Shaker pits as being technically and financially viable.
Located approximately 330 km north-east of Kalgoorlie-Boulder, the Tropicana gold mine is a 70% / 30% ownership split between AngloGold Ashanti Australia and IGO. The open pit mining operation produces gold from four pits extending approximately 5 km in length.
In March 2019, the joint venture partners approved the $105.7 million capital investment for the underground project, with the firing of the first blast for the portal at Boston Shaker taking place on 8 May.
“It is tremendous to start a new underground mine and Tropicana has been a tremendously successful open pit,” said AngloGold Ashanti Australia Senior Vice President Mike Erickson.
“We have started the underground mine on schedule and it is just a fantastic achievement and a great credit to the team,” said Mr Erickson.
Boston Shaker will contribute higher grade mill feed, resulting in an improved gold production profile and enhanced cash flow. Importantly the underground mine will provide improved cash flow during 2021 - 2023 when the mine plan includes periods of higher waste stripping in the Havana open pit.
Ore from the underground mine will enable Tropicana gold production to be maintained at between 450,000-500,000 ounces per annum (100%) over the next five years, lifting the average to 480,000 ounces per annum over the five-year period.
First gold is scheduled for the September quarter in 2020.
IGO Managing Director and Chief Executive Officer Peter Bradford said, “The Boston Shaker underground development is an important step in the continuing value enhancement at the Tropicana Gold Mine, which remains one of the lowest cost gold operations of scale in Australia.”
“This is an exciting opportunity for both IGO and our joint venture partner AngloGold Ashanti Australia," Mr Bradford said.
The expanded ore production from the mine will capitalise on investments made in the Tropicana processing plant, which includes the second ball mill, commissioned in November 2018, increasing throughput capacity to 8.1 million tonnes per annum (Mtpa).
The Boston Shaker ore body remains open at depth and the joint venture partners will continue to test high grade extensions to the mineral resource beneath the Tropicana and Havana pits to assess the opportunity for further underground mining operations.
The ore reserve (100%) is estimated at 2.8 million tonnes grading 3.84 grams per tonne for 317,000 ounces of contained gold, while the Boston Shaker underground resource stands at 12.5 million tonnes at 4.2 grams per tonne for 1.7 million ounces.
The Feasibility Study was based on the mining of 6.58 million tonnes, grading 3.84 grams per tonne, assuming the systematic conversion of resources to reserves over the life of the mine.
The average underground mining rate will be approximately 1.1 Mtpa (including development) over an eight-year mine life to 2026 to produce a total of 732,000 ounces. Mining methods will comprise conventional mechanised mining and underhand sub level open stoping.
The proposed mining fleet comprises: two jumbos, two production drills, three remote-capable loaders and four trucks.
An underground mining contract was awarded to Macmahon Holdings, the mining alliance partner at Tropicana since commencement of open pit mining in 2012. As Macmahon will operate both the open pit and underground mines significant operational and management synergies will be delivered.
The underground operation adds an additional year to Tropicana’s overall mine life, taking it to 2029 based on the current Measured, Indicated and Inferred Mineral Resource of 136.2 million tonnes at 1.76 grams per tonne for a contained 7.7 million ounces.
Mining of the first stope is scheduled to begin in August 2020.
Metallurgical test work based on current processing plant conditions indicate a recovery rate of 89.9% from the underground ore. Underground ore will be blended with open pit ore and no changes are anticipated in the plant operating expenditure.
Once the first underground development is operational, the expansion is set to make around 100 new jobs available as early as mid-2020. The current road entrance to the mine site means that for the moment no residential roles will be offered, however they are also exploring the possibility of adding more charter flights from Kalgoorlie-Boulder.
Exploration drilling results indicated further potential for long-term underground developments, theoretically extending the life of the mine beyond 2029.