La Colosa Gold Mine, Colombia

The La Colosa porphyry gold project is located 150km west of Colombia’s capital city, Bogota, in the district of Tolima. La Colosa is the second major greenfield discovery in Colombia. AngloGold Ashanti explored in the site in 2006, followed by initial JORC-compliant resource estimates in May 2008.

Resource delineation drilling was undertaken during 2007 and by the end of the year around 12,000m of diamond drilling (in 42 drill hoes) had been completed.

The company announced an initial inferred resource of 468.8 million ounces at 0.86g/t gold totalling 12.9 million ounces.

The drilling and resource modelling at La Colosa is defined as a porphyry system with a grade of more than 0.3g/t Au extending over a strike length in excess of 1,500m. It has an inferred mineral resource of 381.4Mt at 1.00g/t Au for 12.3 million ounces of gold at a gold price of $1,000 per ounce and a lower cut-off of 0.3g/t Au.
"La Colosa is the first major gold porphyry discovery in the Andes."

Based on present drilling and geochemical observations, La Colosa’s mineralisation systems, along with the La Belgica sector, remain open to the north, south and east.

La Colosa is the first major gold porphyry discovery in the Andes and AngloGold Ashanti has first mover advantage with granted and application tenements covering an area of around 61,700km².

Drilling activities at La Colosa were suspended in late February 2008 due to environmental requirements. Subsequently, all the necessary documentation was submitted to the relevant authorities for approval. The drilling activities are expected to resume in April 2009.

During 2008, the mineral resources increased by 33.4 million ounces to 241.0 million. The project enabled company to add 12.9oz of gold to its resource base by the end of 2008.

Future output is estimated at 700,000oz of gold.


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Kalgold Gold Mine, South Africa

Kalgold mine is an open pit operation owned by South Africa-based Harmony Gold Mining Company Limited. Located 60km south of the town of Mafikeng in the North West Province of South Africa, the mine includes a Carbon in Leach (CIL) plant.

Harmony acquired Kalgold in July 1999, and in November 2003 the group entered into an agreement to sell the mine to Afrikander Lease Limited. However, the contractual obligations were not met and subsequently the agreement was cancelled in March 2004.

Production disruptions at Kalgold

Water shortages followed by heavy rainfall and electric disruptions had a negative effect on production at Kalgold in 2007 and 2008, leading to a loss of production, which was compounded by numerous instances of plant breakdowns.

The disruptions caused 3% decline in the volumes milled at Kalgold in 2008. However, a significant improvement in the gold grade to 1.89 gram per tonne during the year helped Harmony to more than double its gold production from the mine.

Geological information

Operations at the Kalgold mine are located within the Kraaipan Greenstone Belt near Mafikeng town.

The belt is a part of the larger Amalia-Kraaipan Greenstone terrain. It comprises linear belts of Archaean meta-sedimentary and meta-volcanic rocks trending northwards and separated by granitoid units.

Shallow dipping quartz veins in the form of swarms or clusters within the steeply dipping magnetite-chert banded iron formation are found in the mineralisation.

The largest orebody encountered in the region is the D Zone, which has been mined extensively along a strike length of 1,300m within a single open pit operation. Mineralisation was also found in the A Zone; the Mielie Field, adjacent to the D Zone; A Zone West (along strike to the north of the D Zone); and the Watertank and Windmill areas to the north of the A Zone.

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Omagh Gold Project, United Kingdom

The Omagh gold project, situated in Crown Estate prospecting licence OM 1/03, covers an area of about 189km2, straddling the counties of Tyrone and Fermanagh in western Northern Ireland.

Omagh Minerals Ltd (OML), a wholly owned subsidiary of Canadian company Galantas Gold Corp, owns the freehold to the site as well as the prospecting and mining rights, planning consent and infrastructure.

Following the discovery and exploration of vein gold at Curraghinalt in the Sperrin Mountains by Ennex International in the mid-1980s, Riofinex North Ltd began exploration of the geological inlier known as Lack, named after a local village. Riofinex discovered the gold-bearing Kearney vein structure – the current focus of production – and the surrounding swarm of gold veins during the course of an exploration and resource delineation programme.

In 1990, the project was transferred to OML, which was acquired in 1997 by Ontario-based European Gold Resources. In 2004, the company was renamed Galantas – Gaelic for ‘elegant thing’.

The $20m project has been funded through a series of stock issues. The payback period is estimated at 2.7 years from July 2008.

Geology

The licence includes a 72km2, partly fault-bounded, Lack inlier of upper Proterozoic age and upper Dalradian metamorphic rocks, surrounded by lower Palaeozoic rocks. The Dalradian of the eastern half of the Lack inlier, where most of the exploration work has been done, consists mainly of a series of quartz-feldspar-muscovite-chlorite schists of varying composition.

Mineralisation within the structures consists of quartz veins up to a metre wide with disseminated to auriferous sulphides, predominantly pyrite and galena, with accessory arsenopyrite and chalcopyrite.

Resources

The mine consists of several veins of varying ore grades. May 2008 estimates put total measured and indicated resources at 104,000oz Au and inferred resources at 295,800oz Au. The resources are independently reported to CIM code and Canadian National Instrument 42-101 standard. Extraction of only two of the veins, of which Kearney is the largest, is expected to give a mine life of 4.6 years.

Production

The Kearney vein is being mined by open-pit methods. The rock is sufficiently naturally fractured that blasting is not required.

There are two types of overburden within the pit: peat and glacial till. Both are being stockpiled for use in later restoration. Below the till lies bedrock, both barren country material and mineralised gold resource. The ore is being mined using a narrow excavator bucket then taken to a nearby processing plant by dump truck.

Processing

The processing plant uses conventional crushing, grinding and flotation to produce a lead sulphide concentrate. The ore is crushed in three stages (two-stage for the smaller pieces) and ground with water in a ball mill to fine sand, about half of which is less than 75 microns. Some of the ground material is treated by gravity methods but most of it is mixed with water, foaming and flotation agents, then passed to froth flotation tanks. The foam is then taken from the top of the cell, cleaned and dewatered and the resultant concentrate packed for shipment and sale.

First concentrate was shipped in February 2007. Concentrate enhancement experimentation is taking place. Froth washing has so far proven more effective than use of a regrind circuit.

During 2007 Galantas processed ore containing 6.24g/t gold and achieved a recovery of 89%. This improved during the year such that, after May 2007, the average recovery was 90% and the average after November 2007 was 92%.

Recovery for January and February 2008, at 83g/t, was similar to the 2007 average but the average for March and April 2008 rose to 106g/t.

The concentrate is sold via an offtake agreement with Xstrata subsidiary Falconbridge, of Canada, while part of the recovered gold is designed and sold by Galantas Irish Gold through retail channels such as Galantas-branded 18ct gold jewellery.

Power is provided by a 1,000kVA genset, a 400kWA genset and an 80kVA genset, although not all are in use at any one time. Galantas anticipates that mains electricity will be provided in due course.