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Anglogold was formed last June through the merger of the gold operations, mineral rights and exploration activities of parent
In December, Anglogold acquired Minorco’s gold assets in a US$492-million deal that brought into the fold five operating gold mines in North and South America: Jerritt Canyon in Nevada; Pikes Peak in Colorado; Serra Grande in Brazil; Morro Velho in Brazil; and Cerro Vanguardia in Argentina.
Funded by a US$350-million bank loan and a 535,045-oz. gold loan worth about US$150 million, the Minorco deal immediately added 860,000 oz. gold to Anglogold’s 1999 production, which is projected at 7.1 million oz. gold at a cash cost of US$209 per oz. and a total production cost of US$240 per oz.
The three South American operations will contribute about 373,000 oz. gold to Anglogold’s credit in 1999, compared with the 306,000 oz. produced for Minorco in 1998.
In total, the North and South American properties give Anglogold an additional 9.4 million attributable ounces of gold in reserves and another 17.1 attributable ounces in the resource category.
With most of Anglogold’s mines being deep, sediment-hosted operations in South Africa’s Witswatersrand basin, the Minorco acquisition has given the company added exposure to open-pit and shallow underground mining operations and is diversifying the major into greenstone and epithermal geological environments.
Anglogold’s South American operations are now overseen by the newly created division Anglogold South America, which is based in Nova Lima, a suburb of Belo Horizonte in Brazil’s Quadrilatero Ferifero region. Roberto Carvalho Silva, former president of Minorco’s gold division, has changed hats to become president of Anglogold South America. He presides over the following number of employees: 442 at Serra Grande; 1,131 at Morro Velho; and 295 at Cerro Vanguardia.
Anglogold and Toronto-based
The Serra Grande mining complex consists of two mines (Mina III and Mina Nova), two advanced-stage prospects (Corpo Sul and Corpo IV) and two prospects undergoing a preliminary evaluation (Alvo Dietz and Alvo Palmeiras).
Serra Grande’s gold deposits are hosted by sheared, greenstone-belt graphitic and sericitic schists, volcanics and carbonates. Gold mineralization is associated with shallow-dipping massive sulphides and quartz veins.
Total proven and probable reserves are pegged at 4.6 million tonnes grading 6.6 grams gold for 980,000 contained ounces gold, whereas measured and indicated resources are estimated to be 4.9 million tonnes grading 6.8 grams gold, equivalent to 1.1 million contained ounces gold.
Production at Mina III began in 1989 and by 1997, production had increased to 488,000 tonnes annually.
Today, Mina III is mined by cut-and-fill methods in the upper, wider levels and by room-and pillar methods in the lower, narrower levels. Mina Nova is being mined by room-and-pillar methods only, whereas Corpo IV will be mined by room-and-pillar methods when production begins in 2003. Corpo Sul will be mined mostly by cut-and-fill.
Overall, production is based on a 5-day week, targeting 2,000 tonnes per day, with the life-of-mine production planned at 600,000 tonnes of ore annually.
Serra Grande has free-milling sulphide ore containing free gold in the lower ore zones. A processing plant was originally designed to treat 300,000 tonnes per year with an estimated gold recovery of 95%, but as the ore’s mineralogy changed with depth, pre-aeration was added to reduce reagent consumption without reducing gold recovery.
In 1994 at Serra Grande, a large segment of the downstream face of a tailings dam failed when a blanket drain clogged. The dam has since been rehabilitated with the installation of a sand blanket, drains and a rockfill buttress.
In 1996, plant capacity was boosted to 538,000 tonnes per year, and the facilities now include crushing, grinding, pre-aeration, leaching, filtration, zinc precipitation and smelting.
Last year at Serra Grande, an estimated 68,000 oz. were produced to Minorco’s account at a cash cost of US$198 per oz. and a total cost of US$248 per oz. In 1999, Anglogold’s attributable production is projected at 74,000 oz. at a cash cost of US$152 per oz. gold and a total cost of US$216 per oz.
In Nova Lima in Brazil’s Minas Gerais state, Anglogold has a 100% interest in Mineracao Morro Velho, which has been in production for more than 100 years.
Gold mineralization at Morro Velho is hosted by greenstone-belt volcano-sedimentary rocks of the Nova Lima group, part of the Rio das Velhas supergroup. Gold is mostly associated with sulphides and quartz veins in banded iron formations (BIFs) and mafic-to-ultramafic sequences. The original metamorphic grade is generally low, and hydrothermal alteration is ubiquitous in the ore zone.
While mineralization is stratiform, owing to to its association with BIF and the selective sulphidation of iron-rich layers, the most significant controls are intersections of thrust faults with tight isoclinal folding, with the highest grades and thickest orebodies occurring at fold hinges.
Proven and probable reserves at Morro Velho stand at 9.2 million tonnes grading 7.5 grams gold (2.1 million oz.), with measured and indicated resources of 20.6 million tonnes grading 8 grams gold (5.3 million oz.). A further 11.6 million tonnes grading 7.1 grams gold lie in the inferred-resource category.
Today, Morro Velho’s production is derived from three mines: Espirito Santo, Mina Velha and Cuiaba. With the open-pit Espirito Santo soon closing and the underground Mina Velha due to close in 2001, future production will be limited to the underground Cuiaba mine, which is slated to produce until about 2020.
At Mina Velha, overhand cut-and-fill with hydraulic backfill is used, while Cuiaba makes use of conventional overhand cut-and-fill. Mining at Cuiaba is set to exploit eight orebodies at a rate of 2,000 tonnes per day through to 2012, after which time the production rate will be reduced until ore is depleted.
Composed of refractory sulphide gold plus some fine free gold, crushed ore from Velha and Cuiaba is conveyed by aerial tram a distance of 5 km and 15 km, respectively, to a processing plant at Queiroz, where a milling circuit has been designed to process 630,000 tonnes annually with a 93% gold recovery. Plant capacity has been boosted to the present daily average of 1,850 tonnes per day, with daily highs of 2,100 tonnes being achieved.
In 1998, Minorco produced 186,000 oz. gold from Morro Velho at a cash cost of US$208 per oz. and a total cost of US$330 per oz. For 1999, production is projected at 177,000 oz. gold at a cash cost of US$187 per oz. and a total cost of US$246 per oz.
Anglogold holds a 46.25% interest in the new Cerro Vanguardia open-pit mine, situated in the remote Santa Cruz province of Argentina’s Patagonia region. The remaining partners are the South American firm Perez Companq (46.25%) and the provincial government agency Fomento Minero de Santa Cruz Sociedad del Estado (7.5%).
At Cerro Vanguardia, basal Precambrian metamorphic rocks and Permo-Triassic sedimentary rocks have undergone extensional tectonics and produced a series of horst and graben structures. Subsequent volcanism during the Jurassic period infilled these grabens with thick sequences of andesites and ignimbrites and has promoted epithermal mineralization.
Gold and silver occur in a series of narrow, banded quartz veins within shear zones that crosscut ignimbrite sequences. Mineralization is typically low-temperature, epithermal adularia-sericite type, with gold deposited as native gold or electrum with minor enr
ichment near surface.
Proven and probable reserves at Cerro Vanguardia are pegged at 9.1 million tonnes grading 9.6 grams gold, equivalent to 2.8 million contained ounces. Measured and indicated resources stand at 12.1 million tonnes of 9.4 grams gold, or 3.6 million contained ounces. A further 1.1 million tonnes of 4.9 grams gold lie in the inferred-resource category. Silver grades average 114.4 grams per tonne, and about 26.4 million oz. silver will be recovered by the end of the mine’s life in 2012.
Operations at Cerro Vanguardia will exploit several open pits, with mining only recently getting under way in four pits. Ore is being stockpiled on a pad near a first-stage crusher, while potentially heap-leachable material is stockpiled near the mine’s waste dumps.
The Cerro Vanguardia plant is a 2,000-tonne-per-day cyanidation plant, but actual operating capacity is likely to be 25-30% higher. The presence of manganese oxide in the ore results in longer leach times at higher cyanide concentrations, and these in turn are escalating operating costs.
With production beginning at Cerro Vanguardia in October 1998, Minorco’s estimated share for 1998 was 52,000 oz. gold at a cash cost of US$115 per oz. and a total cost of US$1,056 per oz. In 1999, Anglogold’s projected attributable production will be 133,000 oz. gold at a cash cost of US$124 per oz. and a total cost of US$193 per oz.
However, Anglogold’s share of production is expected to drop to about 74,000 oz. annually by 2004 as grades decrease. Over the life of the mine, cash costs are expected to be US$167 per oz. gold.
In addition to the operating mines, Anglogold acquired several gold exploration projects where three feasibility studies are due to be completed by year-end: the first, on targets near the Morro Velho mine; a second, on ground near the Cerro Vanguardia mine; and a third, at the Amapari project in northeastern Brazil.
Amapari is an Archean iron-formation replacement deposit where exploration has defined an oxide resource of 20.8 million tonnes grading 1.8 grams gold per tonne (1.2 million contained ounces gold). A further sulphide resource has a geological potential of about 5 million tonnes of 5-7 grams gold that is minable by open-pit methods.
“In terms of greenfields projects, Amapari is the one that will come into production first, provided the numbers sort themselves out,” says Robin Mills, Anglogold’s executive officer of international operations. He likens Amapari to the Yatela deposit in Mali and predicts it too will be a heap-leach operation.
“We are also keen to get into Peru,” adds Mills, “and Ian Cockerill [Anglogold’s executive officer of business development] is certainly busy on that.”
Through its business development unit, Anglogold has other, less-advanced gold exploration projects in South America. These include: the Amapa regional survey of northeastern Brazil; the Aripuana, Sul do Para and Roraima projects in central and western Brazil; the Minas Guariche project in Venezuela; and the Hualcamayo project, under option to
In all, Anglogold has budgeted US$15.2 million for exploration in South America in 1999, up sharply from the US$6.3 million spent last year.
In Mexico, Anglogold has three exploration assets in Sonora State: El Chanate, Basurero and El Antimonio. El Chanate has a resource of 14 million tonnes grading 1.5 grams gold for a total 660,000 contained ounces gold. At present, the deposit is too small to be developed by Anglogold, but peripheral projects may provide enough resources to justify further work.
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