SOURCE: AngloGold Ashanti

AngloGold Ashanti

November 11, 2010 01:47 ET

AngloGold Ashanti Tropicana Gold Project Development Approved

JOHANNESBURG, SOUTH AFRICA--(Marketwire - November 11, 2010) - AngloGold Ashanti (NYSE: AU) Announces Tropicana Gold Project Development Approval

Development of the Tropicana Gold Project in Western Australia has been approved by the Boards of AngloGold Ashanti Ltd and Independence Group NL.

AngloGold Ashanti has a 70% interest in the Project, which is located 330 kilometres east-northeast of Kalgoorlie in WA, and Independence Group has 30%.

The approved project will produce 3.45 million ounces of gold over a 10 year mine life at a cash cost of A$710-A$730/oz (US$696/oz-US$715/oz*). In the first three years of operation, gold production will be between 470,000-490,000 ozpa at a cash cost of A$580/oz-A$600/oz (US$568/oz-US$588/oz*).

Capital expenditure, including pre-production operating costs, is estimated at A$690-A$740 million (Real) or A$725-A$775 million (Nominal -- including escalation). At current exchange rates* this equates to US$676-US$725 million or US$711-US$760 million, respectively. The higher production rate in the first three years will contribute to accelerated payback.

Discovered in a remote, barely-explored area not previously thought prospective for gold, Tropicana is the most significant gold discovery in Australia for more than a decade. The Tropicana Joint Venture's first mover advantage has enabled it to peg the bulk of what is now recognised as a major new gold field.

Construction will begin in the June quarter of 2011 and first gold is anticipated in the December quarter of 2013.

"Tropicana is the first of AngloGold Ashanti's major gold discoveries to move into production," said CEO Mark Cutifani. "We're delighted to give the green light to its development."

"This is a clear demonstration of the impact an innovative, results-driven exploration program can have on organic growth," Cutifani said.

"It's gratifying to be developing our own projects at a time when so many majors are forced to pay huge premiums to fill their project pipelines."

The decision to commit to development follows the successful outcome of a Bankable Feasibility Study (BFS) based on open cut mining of the Tropicana and Havana deposits. The BFS does not take into account possible production from the Boston Shaker or Havana Deeps deposits.

The approved project will utilise conventional drill and blast, truck and excavator open cut mining methods carried out by a mining contractor. The 5.8 million tonnes per annum capacity (fresh ore) process plant has been designed for water and energy efficiency, with the comminution circuit comprising two-stage crushing, high pressure grinding rolls and ball milling, followed by a carbon-in-leach circuit for gold recovery.

The BFS was based on a Proved and Probable Reserve of 48 Mt grading 2.2 g/t for 3.4 million ounces of gold (see Table 1 in Appendices). The BFS mining inventory totalled 59 million tonnes grading 2.0 g/t for 3.8 million ounces.

Whilst the initial mine life is estimated at 10 years, the Joint Venture partners are confident this can be extended.

Step-out exploration drilling in late 2009 returned significant results from the Boston Shaker prospect, which lies approximately 360m north of Tropicana resource. Drilling to date has identified the faulted offset of Tropicana mineralisation over an 850m strike length and the mineralisation remains open at depth.

An open pit scoping study based on data available to July 2010 has been completed on Boston Shaker and indicates that an expansion to the current BFS open pit resource is highly likely. Boston Shaker progressed into full feasibility study in September 2010, with completion targeted for the first half of 2011.

Significant results were also received from the Havana Deeps prospect, which represents extensions of the Havana mineralised system external to the Havana open pit.

The recently-completed Havana Deeps scoping study, based on drilling data to the end of July 2010, indicates the potential viability of underground mining at Havana Deeps.

Although it is too early to determine the scale or timing of underground mining, it could commence in parallel with open pit mining, once a suitable portal position is available in the open pit. It is anticipated that Havana Deeps will progress into a pre-feasibility study in early 2011.

The potential of Havana Deeps has been highlighted by a recent deep step-out exploration drill hole, which intersected the mineralised package at 1km depth, in excess of 2.1 km down plunge of the Havana open pit design. Assay results are awaited.

Work is in progress to incorporate the results of the Boston Shaker and Havana Deeps scoping studies, along with subsequent drilling results, into a revised resource estimate by year-end.

Encouraging intersections have also been returned by recent infill RC drilling at the Crouching Tiger Prospect, 250m south of the Havana South BFS pit outline, including 11m @ 5.27 g/t from 102m, 13m @ 1.47 g/t from 147m (including 7m @ 2.27g/t) and 10m @ 1.69 g/t (including 4m @ 3.24g/t). (Table 2)

In addition to the upside in the immediate mine area, the Joint Venture has more than 30 exploration targets within trucking distance of the mine, along with numerous anomalies on its 16,000 square kilometre tenement holding in the highly prospective Tropicana Belt.

Graham Ehm, EVP Australasia, said Tropicana would add to production from the 100% owned Sunrise Dam mine to lift AngloGold Ashanti's Australian gold output to 600,000 ounces per annum by 2014.

"Tropicana will rank as the fifth largest contributor to the company's global production in its first three years and will double the operating cash surplus generated by the Australian region," Ehm said.

He said the Project would employ up to 550 people during construction, and up to 450 people during operations, as well as contributing an estimated A$836 million to the WA economy during construction and a further A$825 million during operations**.

Infrastructure will include 220 km of new road from Pinjin to the site, a sealed all-weather airstrip and development of a borefield 50 km from the mine site for water supply. The mine will operate on a fly-in, fly-out basis.

Tropicana was approved by the WA Minister for the Environment, the Hon Donna Faragher, in October. Approval by the Federal Minister for Sustainability is anticipated by the end of the year.

*The USD capex and cash costs were calculated an AUD:USD exchange rate of 0.98 (as at 5 November 2010)

**Based on an independent study by Compelling Economics.


                             Project Summary

                        100% Project              70%
                        ------------------------  ------------------------
Project Approval        November 2010             November 2010
                        ------------------------  ------------------------
Construction Start      January 2011              January 2011
                        ------------------------  ------------------------
Capital Expenditure     A$690-A$ 740 million      A$483-A$518 million
                        (Real) or A$ 725-A$775    (Real) or A$508-A$543
                        million (Nominal -        million (Nominal).
                        including escalation).
                        This equates to US$676-   This equates to US$473-
                        US$725 million or US$508  US$508 million or
                        million or US$711-US$760  US$498-US$532 million
                        million, respectively.    respectively.
                        ------------------------  ------------------------
First Production        December quarter 2013     December quarter 2013
                        ------------------------  ------------------------
                        5.8 million tonnes per
Plant Throughput        annum.                    4.1 Mtpa
                        ------------------------  ------------------------
Head Grade              2.01 g/t                  2.01 g/t
                        ------------------------  ------------------------
Gold Recovery           90.4%                     90.4%
                        ------------------------  ------------------------
Average Annual
Production - LOM        330,000 - 350,000 ozpa    231,000 - 245,000 ozpa
                        ------------------------  ------------------------
Average Annual
Production- First
3 Years                 470,000 - 490,000 ozpa    329,000 - 343,000 ozpa
                        ------------------------  ------------------------
                        A$710/oz - A$730/oz       A$710/oz-A$730/oz
Cash costs LOM          (US$ 696/oz-US$715/oz*)   (US$696/oz-US$715/oz*)
                        ------------------------  ------------------------
Cash costs - first      A$580/oz-A$600/oz         A$580/oz-A$600/oz
3 years                 (US$568/oz-US$588/oz*)    (US$568/oz-US$588/oz*)
                        ------------------------  ------------------------

* AUD:USD 0.98  (as at 5 November 2010)


Table 1: Tropicana Gold Project October 2010 Proved and Probable Reserve Classification


Category         Tonnes (Mt)        Gold Grade (g/t)   Contained Gold (Moz)
             -------------------- -------------------- --------------------
Proved                         24                  2.3                  1.8
             -------------------- -------------------- --------------------
Probable                       24                  2.1                  1.6
             -------------------- -------------------- --------------------
Total                          48                  2.2                  3.4
             -------------------- -------------------- --------------------


Proved and Probable Ore Reserves have been reported above break-even cut-off grade of 0.6 g/t for Oxide (Transported, Saprolite) and Sap-Rock (also referred to as Transition) materials and 0.7 g/t for Fresh material at a nominated gold price of US$880/oz and an exchange rate of 0.80 AUD:USD (equivalent to A$1,100/oz) as specified in the Tropicana Gold Project Feasibility Study Charter (2009).



Table 2: Crouching Tiger Drilling Results

Collar Information                             Intercept Details
          Easting   Northing   RL  Dip   Azi                    Width  Au
Hole      (m)       (m)        (m) (deg) (deg) From       To     (m)  (g/t)
          --------- ---------- --- ----- ----- ---------- ------ ----- ----
TFRC3301  649066.95 6760515.01 367 -61   319   121.00     131.00 10.0  1.69
                                               including
                                               122.00     126.00 4.0   3.24
                                               173.00     182.00 9.0   1.09
                                               including
                                               180.00     182.00 2.0   1.86
          --------- ---------- --- ----- ----- ---------- ------ ----- ----
TFRC3302  649138.92 6760439.65 370   -61   318 147.00     160.00 13.0  1.47
                                               including
                                               153.00     160.00 7.0   2.27
                                               206.00     208.00 2.0   1.01
          --------- ---------- --- ----- ----- ---------- ------ ----- ----
TFRC3303  648979.55 6760527.65 365   -60   317 91.00      98.00  7.0   1.1
                                               including
                                               93.00      97.00  4.0   1.36
                                               102.00     113.00 11.0  5.27
                                               including
                                               102.00     106.00 4.0   1.08
                                               109.00     111.00 2.0   25.2
          --------- ---------- --- ----- ----- ---------- ------ ----- ----
TFRC3304  649086.03 6760430.89 370   -61   319 107.00     110.00 3.0   1.5
                                               149.00     152.00 3.0   1.31
                                               including
                                               150.00     152.00 2.0   1.67
          --------- ---------- --- ----- ----- ---------- ------ ----- ----


Intercept Parameters: Minimum intercept 2m @ 0.5g/t; Lower cut off grade 0.5g/t; Maximum Consecutive Waste 2m; Minimum intercept grade 1.0g/t.

For further information and illustrations please refer to the Tropicana release on the company's website at www.anglogoldashanti.com

Certain statements made in this communication, including, without
limitation, those concerning the economic outlook for the gold mining
industry, expectations regarding gold prices, production, cash costs and
other operating results, growth prospects and outlook of AngloGold
Ashanti's operations, individually or in the aggregate, including the
completion and commencement of commercial operations of certain of
AngloGold Ashanti's exploration and production projects, the completion of
announced mergers and acquisitions transactions, AngloGold Ashanti's
liquidity and capital resources, and expenditure and the outcome and
consequences of any litigation proceedings or environmental issues, contain
certain forward-looking statements regarding AngloGold Ashanti's
operations, economic performance and financial condition. Although
AngloGold Ashanti believes that the expectations reflected in such forward-
looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Accordingly, results could
differ materially from those set out in the forward-looking statements as a
result of, among other factors, changes in economic and market conditions,
success of business and operating initiatives, changes in the regulatory
environment and other government actions including environmental approvals
and actions, fluctuations in gold prices and exchange rates, and business
and operational risk management. For a discussion of certain of these
factors, refer to AngloGold Ashanti's annual report for the year ended 31
December 2009, which was distributed to shareholders on 30 March 2010.  The
company's annual report on Form 20-F, was filed with the Securities and
Exchange Commission in the United States on April 19, 2010 and as amended
on May 18, 2010. AngloGold Ashanti undertakes no obligation to update
publicly or release any revisions to these forward-looking statements to
reflect events or circumstances after today's date or to reflect the
occurrence of unanticipated events.  All subsequent written or oral
forward-looking statements attributable to AngloGold Ashanti or any person
acting on its behalf are qualified by the cautionary statements herein.

AngloGold Ashanti posts information that is important to investors on the
main page of its website at www.anglogoldashanti.com and under the
"Investors" tab on the main page.  This information is updated regularly.
Investors should visit this website to obtain important information about
AngloGold Ashanti.

JORC Compliance: The information in this report that relates to Ore
Reserves is based on information compiled by Marek Janas, a full time
employee of AngloGold Ashanti Australia Ltd, who is a member of the AusIMM.
Marek Janas has sufficient experience relative to the type and style of
mineral deposit under consideration, and to the activity which has been
undertaken, to qualify as a Competent Person (or Recognised Mining
Professional) as defined in the 2004 Edition of the JORC Code. Marek Janas
consents to the release of this reserve based on the information in the
form and context in which it appears.

The information in this report that relates to Mineral Resources is based
on information compiled by Mark Kent, a full-time employee of AngloGold
Ashanti Australia Ltd, who is a member of the AusIMM. Mark Kent has
sufficient experience relative to the type and style of mineral deposit
under consideration, and to the activity which has been undertaken, to
qualify as a Competent Person (or Recognised Mining Professional) as
defined in the 2004 Edition of the JORC Code. Mark Kent consents to the
release of this resource based on the information in the form and context
in which it appears.

The information in this report that relates to Exploration Results is based
on information compiled by Mark Doyle, a full-time employee of AngloGold
Ashanti Australia Ltd, who is a member of the AusIMM. Mark Doyle has
sufficient experience relative to the type and style of mineral deposit
under consideration and to the activity that has been undertaken, to
qualify as a Competent Person (or Recognised Mining Professional) as
defined in the 2004 Edition of the JORC Code. Mark Doyle consents to the
release of this resource based on the information in the form and context
in which it appears.

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