Gas pipeline project to fuel Tropicana Gold Mine

ASXASX Release
21 July 2014
GAS PIPELINE PROJECT TO FUEL TROPICANA GOLD MINE
Independence Group NL (“Company”) (ASX: IGO) is pleased to advise that AngloGold Ashanti (AGA), on behalf of the Tropicana Joint Venture (TJV) (IGO 30%, AGA – 70% and manager), has entered into agreements with APA Group (APA) for the transportation of natural gas to the Tropicana Gold Mine (TGM) in the eastern
goldfields.
Under the agreements APA will construct a new 292km gas pipeline which will connect TGM to APA’s Goldfields Gas Pipeline and Murrin Murrin lateral. The existing power generator at TGM, Kalgoorlie Power Systems (KPS), a subsidiary of Pacific Energy, will change out the diesel generators at Tropicana and replace these with gas fired generators resulting in:

TJV power generation costs are expected to reduce by 12%-15% which will result in a reduction cash costs of about $25 to $30 per ounce of gold;
Power costs more certain with links to CPI, reducing exposure to diesel price volatility;
Fewer truck movements to and from TGM and as a result, lower road maintenance costs;
Natural gas is a cleaner fuel, which will result in lower greenhouse gas emissions.
“Generating Tropicana’s power requirements from gas fired power generators will reduce TGM’s dependence trucked diesel fuel as well as reduce operating costs,”


Figure 1 – Proposed pipeline construction (in red)