Angolgold aims at 600,000 ounces production per year

Obuasi, April 27,GNA - Anglogold Ashanti's Obuasi mine in Ghana could be a 600,000 ounces per year producer in five years, if plans to boost underground production and plant efficiencies are realised. Other indicators determining the new figures are finding of new deposits and new surface deposits. Speaking to journalists during a mine tour on Thursday Mr Robbie Lazare, CEO of Africa Underground noted that the Obuasi mine was potentially one of the biggest ore bodies in the AngloGold Ashanti stable.

"Obuasi will produce 415,000 ounces of gold at a total cash cost of 327 dollar per ounce this year against some 400,000 ounces at 350 dollars per ounce in 2005", he said.

The nine-shaft mine will build up to 450,000 ounces over the next three years, with production coming from underground and possible surface operations. That level of production, he indicated, is not contingent on finding surface deposits, he added. Mr Lazare said Obuasi, a 400,000 ounce mine, "but we'd like to see this rise up to 600,000 ounce ata market price of 300 dollars per ounce for the next 30 year.

The company's current reserves stand at five-months but management says they wish for at least 10 months of development by the end of the year. It needs three months of drilled reserves and is currently on two.

He added that reaching this level of production would hinge on accessing deep-level ore, finding surface deposits and improved plant efficiencies.

Mr Lazare said the mine had not performed to AngloGold's expectations after it had acquired it in a merger with Ghana's Ashanti Goldfields in 2004, but the mine should be performing to at least South African standards in the next couple of years.

"The deal took a lot longer to put together and so there was an extra year of capital starvation. We had expectations in the company of coming in and turning it around a lot quicker," he said. "We can get things together in the next two years, taking care of production, development and restructuring."

AngloGold Ashanti has spent 100 millon dollars on upgrading the mine and its systems since the take over.

Two years after the merger, AngloGold Ashanti is making progress at the mine where production had fallen from over a million ounces in the late 1990s to around 400,000 ounces.

The Mine's General Manager, Kwesi Enyan admitted that the problem was coming from a focus on cheaper surface production rather than putting money into underground development.

This, he noted, AngloGold Ashanti is working hard to turn around. AngloGold Ashanti, the world's second largest gold mining company is keen to return to a similar model practised under the former management of having a blend of underground and surface ore to supplement both its sulphide and oxide plants.

He told the Ghana News Agency that the company was moving quickly to drilling of surface areas and needed to find further operations for surface mining because, "the oxide plant is starting to run dry." Mr Lazare said Obuasi will spend 45 million dollars on exploration, not including the four surface prospects with a great focus on findings below 1,500 metres, the deepest point in the mine.

The company said it would work at developing ore "mini-deeps" project at a further 300 metres if the company's Board approves thew deal in October. 27 April 06