The proposed $700 million Tropicana gold project of AngloGold Ashanti in Western Australia is a step closer to happening after the project got the greenlight from the state’s Environmental Protection Authority (EPA).
The EPA said yesterday that it would recommend to WA Environment Minister Donna Faragher that she approve the planned mine which about 330 kilometres northeast of Kalgoorlie on the edge of the Great Victorian Desert.
The EPA said it was unlikely its objectives would be compromised by the proposed development, provided the South Africa-based mining group implemented the EPA’s recommended conditions relating to flora and fauna, groundwater quality, rehabilitation and mine closure.
The EPA commended AngloGold volunteering to establish the Great Victoria Desert Trust, which would facilitate biological research, especially into dune restoration and rehabilitation.
"This has the potential to benefit the wider Great Victoria Desert region during and after the life of the project," EPA chairman Paul Vogel said in a statement on Monday.
AngloGold is expected to complete a feasibility study on the Tropicana project in the December quarter.
The $700 million project is a joint venture with Independence Group NL, which holds a 30% stake.
Shares in AngloGold Ashanti, which operates the Sunrise Dam gold mine in WA, fell rose 4c at $9.49 yesterday.
Ashanti has said the mine could produce up to 430,000 ounces of gold a year, which would have given it a life of 10 years.
But the company is now planning on producing around 330,000 to 400,000 ounces a year for a life of 15 years.
That would give a total output of 3.6 million ounces, based on current known reserves.
At around $US1200 an ounce, the output would be worth around $US4.3 billion.
And, Santos Ltd says it has concluded a $2 billion bilateral bank loan facility to give its balance sheet flexibility for growth plans including its Gladstone liquefied natural gas (LNG) project in Queensland.
The company’s shares rose 6c to $13.71 yesterday. That was in a market that was in the red all day.
The company said in a statement that the new bank loan facility would be used to refinance the oil and gas producer’s existing $700 million of undrawn bilateral bank facilities that mature between 2011 and 2014, and to increase liquidity.
Santos executive vice president and chief financial officer Peter Wasow said the new facility provided the company with additional liquidity during the construction of the Gladstone and Papua New Guinea liquefied natural gas (LNG) projects.
Mr Wasow said the new facility matured after first LNG is produced at these two projects.
"The weighted average term of the new facility is five years," Santos said.
The Gladstone project is scheduled to begin production in 2014, while the PNG project is expected to do so in late 2013 or early 2014.
Santos said it had been supported strongly by existing and new lenders.
"The facility was self-arranged and attracted total offers of A$2.9 billion from 13 banks," Santos said.
"Offers from nine banks were accepted."
Including the new facility, Santos has $6 billion of available funding capacity, including cash and committed corporate and project debt facilities.
The market appears to believe that this deal brings the development of the company’s Queensland coal seam LNG project much closer to realisation.
