Modern Mining May 2019

MINING News

Esaase trucking costs impact on Asanko’s results

nearing completion and, as the pushback comes to a conclusion in Q3, we forecast AISC to decline and maintain our full-year AISC guidance of US$1 040 – 1 060/oz. “After a thorough review of our current operations in my first month as CEO, I can see that we are in the final stages of a two- year capital investment programme, which included a mill expansion from 3 Mt/a to 5 Mt/a, a major pushback of the Nkran pit and the initial development of Esaase. “We are now well positioned to start harvesting the benefits of these major investments as we shift our focus to maxi- mising cashflow generation from the AGM over the next 18-24 months while we work with our JV partner on formulating the long-term development plan for Esaase and optimal life of mine plan for the AGM complex.” No lost time injuries (LTIs) were reported during the quarter, and AGM has now achieved over 24 months and more than 12,3 million employee hours worked with- out a single LTI. AGM achieved steady state levels of production at Esaase in February 2019, with ore mining rates averaging 147 500 tonnes per month over February and March at an average grade of 1,3 g/t. Trucking costs for the quarter were ele- vated as contractors at Esaase transitioned from road construction activities to ore haulage activities. With commercial con- tracts now in place, ore haulage costs are expected to reduce to planned levels of US$7,00-$7,50 per tonne hauled.  Newmont Goldcorp’s Africa production is expected to be 1,1 million ounces in 2019 with a full year of production from Subika Underground, higher grades fromthe Subika open pit and improved mill throughput in the second half of the year with the Ahafo Mill Expansion. Production is expected to be 930 000 ounces in 2020 with lower grades at Akyem and the Subika open pit which are partially offset by higher underground grades at Ahafo and a full year of production from the Ahafo Mill Expansion. In 2021, production is expected to be 1 million ounces as Akyem reaches higher grades near the bottom of the pit. The com- pany continues to advance the Ahafo North project and other prospective surface and underground opportunities. 

The Esaase site, where mining activities are now in full swing (photo: Asanko Gold).

Reporting on its activities during Q1-2019, Asanko Gold Inc, listed on the TSX and NYSE American, says that its Asanko Gold Mine (AGM) in Ghana is on track to meet 2019 guidance of 225 000 to 245 000 ounces. AGM – which is a 50:50 joint ven- ture with Gold Fields, which is managed and operated by Asanko – recorded a net loss after tax of US$14,1 million for the quarter including a loss of US$13,3 mil- lion associated with adjustments to the carrying value of ore stockpile inventory. The all-in sustaining cost (AISC) over the reporting period was US$1 123/oz.

Commenting on the Q1-2019 perfor- mance, Greg McCunn, Chief Executive Officer, said: “The Asanko Gold Mine deliv- ered a solid operational performance producing 60 425 ounces, in line with our guidance for 2019. Costs for the quarter were impacted by higher trucking costs as we initiated mining operations at the large scale Esaase deposit. Commercial truck- ing contracts are now in place and we expect oxide ore from Esaase to represent 25-30 % of the mill feed on an ongoing basis. In addition, we continued with the waste stripping of Cut 2 at Nkran. This is The Ahafo Mill Expansion, together with the company’s recently completed Subika Underground project, will improve Ahafo’s production to between 550 000 and 650 000 ounces per year for the first five full years of production (2020 to 2024). During this period, Ahafo’s CAS (costs applicable to sales) is expected to be between U$650 and U$750 per ounce and AISC is expected to be between US$800 and US$900 per ounce. This represents an average produc- tion improvement of between 200 000 and 300 000 ounces at a CAS improvement of between US$150 and US$250 per ounce and an AISC improvement of U$250 to U$350 per ounce, compared to 2016 actuals.

Ahafo Mill Expansion to start producing in Q4-2019 Reporting on its assets in Ghana in its first quarter 2019 results, Newmont Goldcorp Corporation, listed on the NYSE and TSX, says that both first production and com- mercial production from the Ahafo Mill Expansion are expected in the fourth quar- ter of 2019.

The expansion is expected to increase average annual gold production by between 75 000 and 100 000 ounces per year for the first five years beginning in 2020. Capital costs for the project are estimated between US$140 and US$180 million with expenditure of approximately US$35 to U$45 million in 2019. The project has an IRR of more than 20 %.

12  MODERN MINING  May 2019