2017 exploration highlights
Global exploration spend of US$87M was made in 2017, with the bulk of the Group's on-lease exploration activity taking place in the Australia (87%) and West Africa regions (13%), where the five operating mines have good growth potential. The exploration expenditure at the Australian region operations (US$75M) delivered positive results at all the operating sites. Each of the Australian sites has worked to balance their project pipelines by identifying early-stage targets (Milestones1-2 in the graphic below), using a combination of geophysics and full-field aircore to identify emerging targets.
At Agnew, both surface and underground drilling was undertaken to extend the Waroonga North ore body footprint which remains open at depth, and with total reserve growth, driven by the discovery of 203koz, the mine was successful in replacing Reserves post-depletion. Granny Smith underground drilling produced significant net reserve growth of 510koz post depletion, to maintain an eight-year LoM profile through the drilling of Wallaby Zone 110-120 horizons and also at the Zone 100 and Zone 60-90 lodes. Focus remains on testing and confirming lateral extensions of all key lodes.
St Ives showed a strong (17%) improvement in Resources, and discovery contributed 177koz to Reserves from the Invincible pit, Invincible South, Justice and Hamlet areas. The site needs significant traction on discovery and conversion in 2018 to improve the current four-year Reserve LoM profile.
In Ghana, the effort at Tarkwa was in areas of the concession that previously had limited exploration, with a primary focus at Kobada, and also on other hydrothermal analogues at Badukrom and Chida. These have the potential for higher-grade hydrothermal open pits that could complement the existing palaeoplacer mill feed. Damang saw expenditure on predominantly Resource extension programmes at Huni and Amoanda North to grow the Reserve base and increase site flexibility.
The Group's strategy of focusing on brownfields (on-lease) exploration to extend mine life continued during the year. The multi-year investment in exploration is yielding good results and is configured to deliver a balanced project pipeline that includes identifying early-stage targets (Milestones 1-2) with project lead times of more than four to five years combined with progressing more advanced projects that can potentially deliver new mining opportunities within the next two to three years (Milestones 3-4).
The emphasis at all mine sites is to strive for Reserve replacement of annual depletion and to ensure the project pipeline is maintained so that discovery and the conversion of Resources to Reserves delivers to maintain business plan production profiles and cash-flow projections.
2018 exploration outlook
The 2018 Group exploration programme continues to support the organic growth strategy with a budget of ~US$88M.
The emphasis remains on replacing production depletion, growing Reserves and adding mine life with ounces capable of sustaining and improving the AISC/oz. The key focus areas for each of the regions in 2018 are summarised below:
Focus on discovery and Reserve replacement to extend life - Speedway trend, Eastern Causeway. Greater Invincible extensional drilling at Invincible UG/South and Hamlet North
Focus on extension and conversion to Wallaby Zones 110-120 and Zone 135
Focus on discovery and conversion at Waroonga North, FBH and Kath
Extensional drilling down dip of open pit and resource conversion at Attila and Alaric deposits
Investment in realising site full potential within two years
Infill drilling at Huni, Saddle and Damang Pit CutBack (DPCB)
Focus on condemnation drilling below the 2025 TSF
Close-spaced drilling at Brecha Principal to test high grade continuity and boundaries
Mine definition grid drilling ongoing to confirm structure and detailed ore body grade and geometry ahead of stoping
The actual exploration expenditure for the 2016 and 2017 periods is shown in the table below:
|December 2017||December 2016|
|Region||Metres||Cost (US$M)||Metres||Cost (US$M)|