annoucement

This in the AGE today... all good publicity but a long way to go?

Tropicana has Midas touch for Anglo, Independence

Barry Fitzgerald

TROPICANA has been confirmed as one of the best gold discoveries in a decade by the AngloGold Ashanti and Independence Group joint venture.

The partners (AngloGold 70%, Independence 30%) have estimated that the West Australian project contains more than 4.05 million ounces of gold (62.8 million tonnes grading 2.01 grams of gold a tonne).

The estimate is for ore that can be accessed by an open-cut, with the partners noting that mineralisation remains open at depth.

"The mineralisation remains open at depth and further drilling is likely to result in moderate increases to the resource. Higher grade extensions of the resource at depth may represent a future underground mining target," the joint venture partners said.

The grade is about the Australian average for open-cuts but the massive mining and treatment rates planned by the partners in a development likely to cost more than $500 million, is expected to make Tropicana one of the more profitable gold mines.

The discovery is a victory for conceptual geology work, with Independence first pegging the ground in 2001 in what is now shaping up as a new gold province about 450 kilometres north-east of Kalgoorlie.

Independence included Tropicana as one of its main properties in its 2001 float, with its interest in the "virgin" mineral area a response to geochemical sampling work by WMC Resources, now part of BHP Billiton, in the late 1990s. The work by WMC, which identified the initial gold anomalies, was never followed up as its was part of a national diamond hunt.

The AngloGold and Independence joint venture is planning a mining and processing rate of between 4 million and 6.5 million tonnes a year. At an average recovery rate of 91.5%, annual production of 236,000 ounces to 385,000 ounces from Tropicana would be possible.

At that range, Tropicana would be about half the size of Australia's big-three gold operations — Newcrest's Telfer, Newmont/Barrick's Super Pit and AngloGold's Sunrise. It would increase Australian gold output by about 5%.

South African-based AngloGold is one of the world's biggest producers, while Independence is best known for its nickel operations in WA.

The companies expect that Tropicana will not be the end of the story in the new gold province. Numerous "promising early stage targets" have been identified within 20 kilometres of Tropicana, while 220 kilometres to the south, drilling at the Beachcomber prospect has returned a three-metre intersection, grading an impressive 65.8 grams of gold a tonne (more than two ounces a tonne).

Independence shares closed 3¢ higher at $8.20 ahead of the Tropicana resource estimate being released. News of the estimate had been well flagged.