Our strategy

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Optimising our assets

We aim to increase production through a programme of continuous operational improvements at our assets. Examples include:

increasing training and also facilities such as the Bulyanhulu Underground Training Centre
moving from in-house power to electricity supplied by the Tanzanian national grid

The Bulyanhulu Underground Training Centre

Managing growth brings many demands – not least, the need for a larger skilled workforce.

As the Bulyanhulu mine heads towards increasing its production, the mining team has recruited a number of highly skilled trainers. Their training centre: a converted space from the mined-out 4700 level which serves as an underground mining school.

An ideal underground environment

The space is a major asset because:

it contains areas for classroom lectures as well as practical skills.
it offers a genuine environment without the added pressure of being in a production area.
the next phase will focus on production, where students can experience ‘real’ working conditions away from actual production environments.

We are also carrying out a skills-gap assessment on all underground employees. They will undergo training to ensure we have the skills required for the opportunities ahead.

During 2010, the centre trained 2,210 new or existing employees.

The North Mara grid-connection project

Diesel-generated power costs considerably more than electricity from the national grid. In late October 2006, North Mara gold mine opened talks with TANESCO, Tanzania’s national power utility, on the feasibility of connecting to the electricity grid.

The scope of work involved:

installing 88 km of 132kV overhead power line from the Musoma substation to Nyamongo
constructing a new substation at Nyamongo and modifications to existing substations
relocating a number of static variable compensators and upgrading capacitor banks in what was known as the ‘Grid Stability Project’.

The project ran from January 2008 to September 2009, with capital investment running at around US$40 million. Since 2010 the mine has benefited significantly from the project’s outcome, thanks to its reduced reliance on diesel-generated power.

Expanding through near-mine projects

We have developed a significant infrastructure at our existing mines and aim to maximise this investment. Examples include:

developing underground operations at the Gokona and Nyabigena pits following highgrade success at North Mara
extending the mine life at Tulawaka through the underground extension in the East Zone

North Mara Underground

ABG is investigating the potential for an underground mine at North Mara.

This would allow us to access a resource that is currently outside the final planned limits of the open pits. It would also enable simultaneous underground and open pit mining, improving our production profile and increasing the life of the mine.

Positive early signs

Initial work at Gokona has been encouraging.

we announced an initial high-grade mineral resource in December 2010.
there may be potential to develop a substantial underground operation at the Gokona and Nyabigena deposits with an attractive grade profile.
we are currently drilling out the resource with the aim of expanding the declared resource to one million ounces.

Tulawaka extension

Tulawaka began open pit operations in 2005 with a declared reserve of 546,000 ounces. However, it had produced 808,000 ounces up until the end of December 2010.

In 2009, open pit mining ceased and underground mining began, exploiting the deeper extent of the ore body while supplementing production with surface stockpiles. Although originally due to cease in 2011, underground resource delineation drilling has resulted in an initial mine life extension into the second quarter of 2012.

Further possibilities

Drilling programmes also point to the potential of restarting open pit mining from the West pit extension. No additional permitting would be required and we are assessing its viability. We are also drilling below current resource areas with a view to assessing the continuity of the ore body at depth and further extending the mine life.

Growing through opportunities and acquisitions

We are committed to growth, both in Tanzania and by becoming a truly pan-African player. Our focus includes:

prospecting for future growth along the Gokona Corridor, at the Nyanzaga projects and elsewhere within our extensive land package in Tanzania
pursuing acquisition opportunities elsewhere within the African gold mining industry.

Gokona Corridor

A group of 57 prospecting licences surround the North Mara operation, encompassing approximately 691 square kilometres of highly prospective Archaean geology. ABG controls the majority of this prospective greenstone belt, with most licences owned 100% by members of the Group. Currently, the top priority target in the region is the 15 kilometre long Gokona Corridor that straddles the Gokona and Nyabigena gold deposits and which is interpreted to extend some five to six kilometres to the north west and nine to ten kilometres to the south east of the open pits. Other targets in the North Mara project include the Komarera trend four kilometres south east of the Nyabirama open pit and, more regionally, the Dett and Surubu prospects some 45 kilometres west of the North Mara operation.

ABG believes that the North Mara District, particularly the Gokona Corridor, is one of the most highly prospective exploration areas in its current portfolio and that the region could eventually add significantly to the existing North Mara resource base. The Company has plans to expand the 2010 reverse circulation scout drilling programme on the Gokona Corridor and infill reverse circulation and diamond core drilling by July 2011.

To date, reverse circulation scout drilling has identified favourable rock types, alteration and some gold anomalism in limited drilling. This is very encouraging for what has initially been a broad-spaced reconnaissance programme. Drilling in 2011 will continue to target extensions to the existing Gokona-Nyabigena mineralised system, with the objective of locating new high-grade gold deposits within trucking distance of the North Mara plant. These programmes will run in conjunction with the programme being undertaken by North Mara mine to add and convert resources in the Gokona and Nyabigena underground areas.

12,000 Metres of drilling planned for 2011.

Nyanzaga

The acquisition of Tusker Gold in the first half of 2010 resulted in ABG gaining 100% control of the Nyanzaga project, which hosts the Tusker and Kilimani gold deposits as well as several other exploration targets. The Nyanzaga project covers some 353 square kilometres of prospective Archaean greenstone geology and lies approximately 35 kilometres north east of ABG’s Bulyanhulu gold mine. Previous resource estimates by Tusker Gold and Sub Sahara Resources NL reported inferred resources of approximately four million ounces for Tusker and Kilimani projects (although ABG has so far only recognised a resource of 963,000 ounces). The Tusker and Kilimani gold deposits and the surrounding exploration targets together represent an opportunity to add significantly to the Company’s resource base, with the potential to contribute substantially to annual production in the medium to long term.

The Company is presently continuing step-out and infill resource drilling on the Tusker and Kilimani deposits along with scout exploration drill programmes across various geophysical and geochemical targets within the project. In late 2010, our drilling on the Tusker resource area identified additional nearsurface mineralisation on the northern end of the resource and new zones of broad, higher-grade mineralisation on the southern end of the resource. These intercepts indicate the potential to identify broad, higher-grade zones within the very large Tusker gold deposit, and the current drill programmes are specifically aimed at extending these newly-identified zones.

The Company plans to drill more than 50,000 metres of resource definition and exploration drilling across the Nyanzaga property in 2011. These drill programmes are focused on identifying additional gold deposits and satellite ore sources that could enhance the economics of any operation established on the Nyanzaga project. We also aim to initiate a scoping study later in 2011 as we gain a greater understanding of the mineralisation in this area.

52,000 Metres of drilling planned for 2011.