Tropicana is looking to the coal sector for an innovative approach to extend its mine life, in a joint venture with owners AngloGold Ashanti and Independence Group to use “strip mining” principles in open-pit coal mining.
If the concept proved feasible, Tropicana’s two main pits, and other satellite pits could be turned into a singular pit that would rival the size of the Super Pit in Kalgoorlie.
AngloGold Ashanti Australia senior vice president Mike Erickson says the success of the project depends on whether there is enough gold between the two pits to justify linking them up.
“In my mind it is like the Golden Mile [in Kalgoorlie] with the consolidation of all those ore bodies that were owned by different parties,” Erickson said.
“I think it is very much a defining moment [for Tropicana]. You would then be cementing a 20-year mine life, a major centre and it would be very significant. It is a massive step change.”
The study would also seek to determine whether mining costs could be lowered enough to make it feasible and what engineering and equipment would be required, with completion expected by the end of 2016.
Tropicana produced 118,204 ounces in the September quarter at an all-in sustaining cost of $US674 an ounce and was one of the key international operations credited for adding lower-cost ounces to the company's production base.
At the end of September, AngloGold's net debt was $2.3 billion compared to $3 billion at June 30 after it used funds from the sale of its Cripple Creek & Victor mine in Colorado to repurchase high-yield bonds.
AngloGold abandoned plans for a $2.5 billion demerger last September after investors fought the move.