Boddington Gold Mine, Perth, Australia

The Boddington Gold Mine (BGM) is about 130km south-east of Perth in Western Australia. The largest undeveloped gold mine in the country, it is poised to become the highest producing mine once production ramps up over the next few years.

The $2.4bn project was initially a three-way joint venture between Newmont Mining, AngloGold Ashanti and Newcrest Mining. In 2006 Newmont bought Newcrest’s 22.22% share, bringing its interest to 66.67% and ending any Australian ownership. AngloGold owns the remaining 33.33%.

The original, mainly oxide open-pit mine was closed at the end of 2001.

Recent exploration has identified an extensive 19.57Moz gold bedrock resource, the basis of the Boddington Gold Mine Expansion Project. Approved in 2006, this will involve mining the hard gold/copper ore that lies beneath depleted oxide pits at Boddington’s original mine site.

The project has an attributable capital budget of between A$0.8bn and A$0.9bn. At year-end, the overall project was approximately 65% complete, with engineering and procurement activities nearing completion. Construction of the treatment plant was approximately 32% complete. At its peak the project is expected to employ some 2,000 workers. Once production begins it is expected that around 650 full-time staff will be required.

Based on the current plan, mine life is estimated to be more than 20 years, with attributable life-of-mine gold production expected to be greater than 5.7Moz.

Newmont and Anglo have focussed their exploration activities on the poorly explored areas of the greenstone belt outside the already identified Boddington Expansion resource. The exploration strategy is to identify the resource potential of the remainder of the greenstone belt, with the emphasis on high-grade lode-type deposits.

Geology and reserves

The BGM is located within the Saddleback Greenstone Belt (SGB), a fault-bounded sliver of Archaean volcanic and shallow level intrusive rocks, surrounded by granitic and gneissic rocks. The SGB produced over 6Moz of gold and is a highly prospective exploration area for further gold mineralisation in both large tonnage stock-work gold resources and high-grade lode-type gold resources.

As of the end of 2007, proven ore reserves at Boddington were 1.618Moz. Total mineral resources (measured, indicated and inferred) were 10.3Moz.

Mining

Built on the footprint of the original Boddington Gold Mine, the operation involves open cut mining from two large pits and is expected to produce an average 850,000oz of gold and 30,000t of copper a year for more than 20 years.

Production is due to commence in late 2008/early 2009 under the management of the Boddington Gold Mine Management Company, a 100% Newmont-owned company.

Production

Average attributable gold production in the first five years will be between 320,000oz and 350,000oz a year, while on an average life-of-mine basis, attributable production is estimated to be between 250,000oz and 270,000oz a year. Copper production, which will be sold as concentrate, is expected to be around 30,000t per year.