Tropicana Gold JV

TROPICANA GOLD JV

Ownership
IGO 30% (AngloGold Ashanti: 70% and manager).


Location
330km ENE of Kalgoorlie.


Tropicana is located on the western edge of the Great Victoria Desert of which the traditional owners and custodians emanate from the Wongatha and Spinifex peoples.

Background and History

IGO targeted and pegged the area containing the current ore reserves in 2001. AngloGold Ashanti farmed into the project in 2002, discovering the Tropicana Operation, Havana and Boston Shaker gold deposits respectively in 2005, 2006 and 2010. The decision to develop the Tropicana Operation was announced in November 2010 following completion of a positive Bankable Feasibility Study. Mining of the Havana deposit commenced in 2012 with the first gold being produced in September 2013. As of January 2019, the Tropicana Operation has produced approximately 2.5 million ounces.

Geology

The Tropicana joint venture concession packages comprise approximately 3,600km2 of tenements stretching over some 160km in strike length along the Yilgarn Craton and Fraser Range Mobile Belt Collision Zone. Tropicana lies to the west of a major tectonic suture between the Yilgarn Craton and the Proterozoic Albany-Fraser Province that stretches over 550km. The majority of the project covers tectonically reworked Archean rocks which form the eastern margin of the Yilgarn Craton. The regional geology is dominated by granitoid rocks, felsic to mafic paragneiss and orthogneiss, and felsic to ultramafic intrusive and volcano-sedimentary rocks. Tropicana is a rare example of a large gold deposit within high grade metamorphic rocks that have undergone widespread recrystallisation and melting.

Mining

Open pit mining operations achieved a 6 per cent increase in tonnes mined over the previous year with 87Mt, equating to 34 million bank cubic metres for the year. The ramp-up in mining rates is aligned to the Long Island Mining Strategy which was approved during FY18. The strategy involves using a strip-mining approach that minimises waste haulage distances by using in-pit waste dumping along with the implementation of a CAT 6060 (600 tonnes class) hydraulic shovel.

Processing

The mill throughput rates now average 931 tonnes per hour, with the optimisation excellence project producing sustainable throughput increases achieving 7.8Mtpa for the FY18 year. Construction on the second 6MW ball mill was completed in December 2018 and became operational as of January 2019. The new mill has enabled an increase in the processing throughput rate to 8.2Mtpa and gold recovery improved to approximately 92 per cent.

FY18 Production

Tropicana Operation gold production for FY18 was consistent, resulting in delivery better than the midpoint of the guidance range. 

During the year, a total of 87Mt of material was mined and hauled ex-pit. This material comprised of 9.6Mt of full grade ore (>0.6 grams per tonne), 0.9Mt of marginal ore (grading between 0.4 & 0.6 grams per tonne Au) and 76.5Mt of waste material.  Full grade ore sources were from all four pits, being the Havana and Havana South pit, the Boston Shaker pit and the Tropicana Operation pit with the average run-of-mine grade for full grade ore (>0.6 grams per tonne Au) being 1.88 grams per tonne gold for the year.

FY19 Guidance

Tropicana Gold produced - 100% basis: 500,000oz to 550,000oz

Tropicana Gold produced - IGO 30% share: 150,000oz to 165,000oz

Cash cost A$635 to A$705/oz Au

All-in Sustaining Costs A$890 to A$980/oz Au

Tropicana FY19 guidance incorporates continued implementation of the Long Island mining strategy, grade streaming and ongoing process plant improvement projects. The grade streaming strategy which delivers higher gold production in FY19 is expected to continue into FY20. The majority of plant and equipment capex is anticipated to be improvement capex. This includes completion expenditure for the additional 6MW Ball Mill and associated infrastructure, which is expected to be completed in 2Q19, Long Island expansion capital, plant improvement capital and Boston Shaker prefeasibility study costs.

Value Enhancement Opportunities

Boston Shaker Underground

In December 2018, it was announced that the pre-feasibility study into the development of an underground mine at Boston Shaker is technically and financially viable. The study confirmed the technical feasibility and potential viability of an underground mine delivering ~1Mtpa of resources to produce in the order of 100,000 ounces per annum over a life-of-mine of approximately seven years based on mine scheduling of the Boston Shaker underground Indicated and Inferred Mineral Resource only.

The Joint Venture Partners, IGO and AngloGold Ashanti are now progressing with a feasibility study, which is expected to be completed in the second half of FY19. The underground operation will be aligned with the open pit design and schedule, capitalising on process plant improvements delivered through the successful commissioning of the second ball mill. The positive results have led to the commitment to additional drilling, as part of the feasibility study to define Ore Reserves.

For more information please see the ASX Release dated 20 December 2018 titled, "Pre-Feasibility Study Confirms Potential For Underground Mine at Tropicana" on the ASX Announcements page.

Near-Mine Exploration

Greenfields exploration drilling completed on several Tropicana tenements in FY18 mapped basement geology and explored potential mineralised corridors identified in regional interpretation work. The JV exploration plan for FY19 is to focus on near mine resource and reserve development support and greenfields discovery work.

MAKING A
DIFFERENCE