Inferred resources of 24 million ounces (moz) of gold grading at 0.9g/t to 1.0g/t Au (March 2012 estimate)
Expected Start of Production
$3bn to $4bn
The La Colosa porphyry gold project is located 150km west of Colombia’s capital city, Bogota, in the district of Tolima. La Colosa is the second major greenfield discovery in Colombia, after Gramalote.
La Colosa gold project is 100% owned by AngloGold Ashanti, the world’s third largest gold producer. Exploration activities at the project site have been underway since 2006 and the pre-feasibility study of the project is expected to be completed by the third quarter of 2013.
The recent upgrade in inferred resources at La Colosa has made it potentially the largest gold project in Colombia and the seventh largest undeveloped gold project in the world.
La Colosa is currently believed to have a potential of producing between 800,000 to 1.2 million ounces (moz) of gold per year for 20 years.
The project, however, grapples with numerous social and environmental challenges. It has faced delays in obtaining government permits due to environmental issues. It also witnessed protests from local communities in the beginning of 2013 over the use of water resources which might affect the agriculture and population of the locality.
Production was originally planned to begin in 2016, but has now been delayed until the end of 2019.
Geology and mineralisation of La Colosa
La Colosa gold project is based on low-grade porphyry copper deposits containing a small amount of gold. Gold grains in the deposit are found both liberated and locked in sulphides and silicates.
The gold mineralisation in the deposit is attributed to porphyry intrusions into Palaeozoic schists around eight million years ago.
Gold mineralisation is believed to have occurred over three early phases of intrusion, which are accompanied by a series of potassic and sodic-calcic alteration events and a late phase of dacite porphyry intrusions.
The gold mineralisation is graded high at more than 1.1g/t Au.
La Colosa gold project reserves
The inferred resources of La Colosa have been consistently upgraded during recent years thanks to the ongoing exploration.
According to the initial JORC compliant resource estimate in May 2008, the inferred resource of the project stood at 468.8moz at 0.86g/t Au totalling 12.4moz of gold.
As of December 2011, the inferred resource of the project increased to 16.2moz of gold.
The resource estimate based on the drilling data till March 2012 further increased by 48% to 24moz of gold at an average grade of 0.9g/t to 1.0g/t Au.
Mining and processing at La Colosa
La Colosa gold project covers a concession area of 600km². The project will involve huge open pit mines. The ore will be processed at AngloGold Ashanti’s proposed gold ore processing plant near the project site.
The company is considering the chemical extraction of gold with the use of a large quantity of cyanides as the project is based on low-grade but large deposit proposition.
The proposed use of cyanides has, however, sparked protest with the allegation that the use of toxic cyanides will be hazardous for the environment.
But, the miner asserts that it will stick to the ‘Cyanide Code’, an industry standard for use of cyanide in mining.
Exploration and drilling at La Colosa
Exploration at the La Colosa site began in 2006. Resource delineation drilling was undertaken during 2007. By the end of 2007 around 12,000m of diamond drilling (in 42 drill holes) was completed based on which the first resource estimate of the project was announced in 2008.
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The exploration drilling activities at La Colosa were, however, suspended in late February 2008 due to environmental issues. The drilling was resumed in the middle of 2010.
By the end of 2011 around 47,619m of drilling was completed, which led to a 30% increase in the inferred resource estimate of the project. Most notable of the recent drilling results was the trace of thick mineralisation grading of 3.14g/t Au.
Drilling is still being carried out at the site with the use of man-portable drill rigs.
The ore body at La Colosa is currently being tested at a depth of 1,000m. The drilling data suggest high-grade intercepts towards the northwest portion of the project site. Exploration drilling will continue for another two years.
However, there has been a change in focus from mineral resource drilling to geotechnical drilling for both pit and infrastructure sites.
Mining costs and investment
The total investment in the La Colosa Gold Project is estimated to range between $3bn and $4bn. The initial cash cost is estimated at around $495/oz.
During 2011, AngloGold Ashanti spent $64m on the prefeasibility study. In the same year an investment of $300m was announced for exploration activities over the next three years.
The exploration conducted so far at La Colosa suggests significant growth potential for the mine. The final scope of the project is yet to be determined.
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