June 26, 2021

AngloGold Ashanti JV Partner IGO Sells Stake To Regis Resources

AngloGold Ashanti has a new JV partner, Regis Resources, after Regis announced it is buying a 30% stake in AngloGold Ashanti's Tropicana mine. This is a $903 million AUD purchase, which Regis says adds one-third to its production base. The other 70% is held by AngloGold.

Regis Resources says it will raise around $650 million AUD to fund the acquisition of the interest that is currently held by IGO Ltd.

Regis Resources shares currently trade at just over $3 per share ($3.17 at the time of writing) under the symbol RRL.AX.

trades under the symbol AGG.AX, currently at $5.70.

AngloGold Ashanti Tropicana

The Tropicana gold deposit is in north-eastern Western Australia. IGO identified and secured the tenements in 2001, discovering gold at Tropicana in 2005, 330 km east-northeast of Kalgoorlie, in the Great Victoria Desert, 330km from Kalgoorlie. The open-pit is mined by a contractor.

Although AngloGold Ashanti discovered the Tropicana deposit in 2005, mining of the open pit did not commence until 2012, with the first gold being produced in September 2013. In the past seven years, more than three million ounces of gold have been produced.

Boston Shaker Underground Project

In March 2019, AngloGold Ashanti Australia Ltd and Independence Group NL approved development of the Boston Shaker Underground Project at Tropicana Gold Mine. The feasibility study confirmed the project was technically and financially viable, anticipating a 39% IRR for a $79.3 million capital investment.

The mine has higher grade mill feed, with an improved gold production profile and enhanced cash flow during 2021-2023. At the time, the company said the underground mine's ore "will enable Tropicana gold production to be maintained at between 450,000-500,000 ounces per annum (100%) over the next five years, lifting the average to 480,000 oz. per annum over the five year period. The project will commence in the June quarter 2019 and first gold is scheduled for the September quarter in 2020."

Tropicana's FY20 gold production was 463K ounces.

anglogold ashanti million oz bar. News photo from tropicanajv.com.au

Anglogold Ashanti million oz bar. News photo from tropicanajv.com.au

Boston Shaker Underground Mine Report

The Boston Shaker underground mine transitioned into commercial production in September 2020 on schedule, below the A$105.7 million budget and importantly, with no safety incidents. Boston Shaker will deliver approximately 1.1 million tonnes of ore per annum at an estimated grade of 3.5 grams/tonne, contributing approximately 100,000 ounces per annum to gold production over a seven year mine life.

The first production stope was fired in June 2020 and the design production rate expected to be achieved in March 2021. Importantly the Boston Shaker mineralisation extends down-dip and remains open at depth, limited only by drilling information.

AngloGold Ashanti Community Work

In the past 20 years, AngloGold Ashanti actively supported education, youth, community development and health programmes in communities across the Western Australian goldfields. These run from Laverton to Kalgoorlie-Boulder and beyond, including the remote Aboriginal community of Tjuntjuntjara.

The company says it maintains a "strong focus" on "supporting education programmes at Eastern Goldfields College, Kalgoorlie-Boulder Community High School and John Paul College."

They also maintain long-term partnerships with indigenous academies, including Kalgoorlie Clontarf Academy, the Kalgoorlie Girls Academy and the Graham Farmer Follow the Dream Programme.

As well as annual funding support for these organisations, the company offers mine site tours, with a view of creating careers in the mining industry and a transition-to-work programme. In addition, Tropicana supports a "Think Local, Buy Local and Employ Local" strategy to promote business opportunities and the growth of local supply networks.

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