As expected, the partners approved phase one of the Long Island strategy, which is focused around strip mining to minimise waste haulage by using in-pit backfill.
Phase one comprises the mining of the Havana South pit and a cutback of the Boston Shaker pit.
Capital costs are estimated at $18 million on a 100% basis.
The full eight stages of Long Island will add 2.1 million ounces to the Tropicana mine plan and extend the life by seven years to 2027, with the remaining two decision points in 2020 and 2022.
The JV also approved a $28 million investment to add an additional 6MW ball mill at the plant, which will increase throughput from 7.5 million tonnes per annum to 8.1Mtpa and should improve gold recoveries by 3% to 92%.
Mining contractor Macmahon Holdings will provide the additional fleet required.
AngloGold senior vice president Australia Michael Erickson said the project was in line with the company’s approach of developing cost-effective brownfield projects with attractive payback periods that extended life and improved margins.
“The project validates the innovative ideas developed by our site team and technical specialists, and also gives us an excellent base from which we can investigate adding additional value through underground mining opportunities and regional exploration,” he said.
The partners have been working on Long Island for the past couple of years and have increased mining rates to over 90Mtpa this year.
Over 100,000m of drilling has been completed, resulting in a new reserve of 66.59Mt at 1.91 grams per tonne gold for 4.08 million ounces of gold.
The partners will continue grade-streaming at Tropicana, prioritising higher grade ore and stockpiling lower grade ore for later processing.
Gold production at Tropicana is expected to increase to 478,000-492,000 ounces of gold next year, and to 530,000-548,000oz in 2019.
The operation produced 431,625oz in the 2017 financial year.
Tropicana is currently Australia’s sixth-largest gold mine, but the approval of Long Island could see it creep up the list.
“The accelerated mining strategy deployed in the 2017 calendar year should deliver elevated gold production rates for the next two years, commencing this 2018 financial year and resulting in higher free cash flow to IGO,” IGO managing director Peter Bradford said.
“This is a great result for our business and for the joint venture, with Tropicana continuing to deliver strong results that bolster IGO’s portfolio of operations reflecting high-quality, long life assets.”
IGO shares fell by 1.6% to $3.985, while AngloGold was down by 0.8% to $2.43.
