JOHANNESBURG (miningweekly.com) – Development of the large, high-grade Vogue orebody at gold miner AngloGold Ashanti’s Sunrise Dam gold mine, in Western Australia, is now under way, with production expected to increase by 25% this year to about 300 000 oz.

This development follows the commissioning of the miner’s Recovery Enhance project at Sunrise, at a capital cost of about $28-million, which was successfully completed on time at the end of June.

The miner, on Thursday, mapped out a plan to sustain long-term production from the mine at between 300 000 oz/y and 350 000 oz/y, with all-in sustaining costs (AISC) at between $1 000/oz and $1 100/oz.

AISC includes capital expenditure of about $20-million for the float/fine-grind and tailings storage expansion.

Should AngloGold be able to fill the mill at four-million tonnes a year, up from the current three-million tonnes, at 3 g/t, at a 90% recovery and assuming a conversion rate of A$0.75 to the US dollar, senior VP for Australia Michael Erickson pointed out that this could result in highly cash generative mine.

The company will mix mined ore with ore held in stockpiles at the mine in an effort to keep the volume of the mine to mill at sufficiently high levels.

It will also mine the remainder of the Vogue orebody in a similar manner, mixing and matching lower- and higher-grade areas in a way that quarterly production would not only be uniform, but profitable.

This, he elaborated, makes Sunrise Dam “one of Australia’s most important gold mines and a cornerstone asset for the group”.

Erickson further said that, with a combination of innovation, strict capital discipline and incremental investment, AngloGold will see a “significant step up in production and a reduction in its AISC over time”.

This improvement pathway at Sunrise enables the miner to optimise the development of the orebody and achieve sustainable cash margins over the life-of-mine.

Included in its plan to sustain long-term production at Sunrise, is an investment into a flotation and fine-grind circuit in the processing plant, which was completed in June.

The rationale behind this investment, Erickson explained, was the gradual decrease in metallurgical recovery owing to the arsenic content of the ore.

With this circuit, the gold miner is aiming to achieve an average increase in recovery of between 8% and 10%.

While not currently concerned about the volume of the orebody, Erickson pointed out that a concern for the company is the challenge to convert that resource into reserves.

Meanwhile, in terms of the evolving mine strategy for Sunrise Dam, the miner has introduced reverse circulation (RC) drilling to the underground environment owing to the coarse nature of the mineralisation.

The RC drilling, Erickson explained, gives the miner a much larger sample volume metric, which he says is “much better from a sampling viewpoint to assist AngloGold in its estimation”.

The miner is also in the process of expanding the tailings storage facility, which will be completed later this year.

AngloGold has also implemented a new underground mine management system to drive its productivity at Sunrise even further, through building capacity for supporting the increased production targets at the gold mine.

The MineSuite system, provided by mineral solutions provider MinLog, will be deployed in stages, with the delivery of the first outcome expected as early as this month.

MineSuite will enable management, geologists, mining engineers, shift supervisors and operators to schedule, track, monitor and control operations.

MineSuite applications at Sunrise Dam will include activity planning and management, short interval control, task management and equipment allocation, material tracking and certification, proximity detection and traffic management, and ventilation control.

AngloGold, meanwhile, also noted that it continues to pursue strict capital discipline and high-return projects with relatively low capital expenditure, as it executes on its strategy to improve free cash flow generation and returns over time.