AGG is going to be cheaper in term of input cost per oz produce....

AGG is going to be cheaper in term of input cost per oz produce. The cheapest in Australia operation once the gas is used for its boilers.
Even though the pog/usd is not going to go pass $1350/usd but AGG is extremely good in the long run.

I'm not going to buy until the sp retreats a little bit.

Gold mines gassed upThursday, 11 February 2016


Andrew Snelling


THE 293km pipeline extension feeding AngloGold Ashanti’s Sunrise Dam and Tropicana gold mines in Western Australia has been commissioned.





Branching off the existing Eastern Goldfields infrastructure, the pipeline was opened at Sunrise in December and is now transporting gas 1800km through to Tropicana.




Minister for Mines and Petroleum Bill Marmion turned the valve on the pipeline at Tropicana yesterday, in the presence of senior management from AngloGold, its Tropicana joint venture partner Independence Group (30%) and pipeline builder APA Group.




The $140 million pipeline was finished in December, just a little over a year from when APA Group first announced its development under two long-term gas contracts with AngloGold.




Those contracts were signed in the midst of a very different market environment, with the price of diesel having since dropped dramatically.




This has done little to dampen spirits, however, with the gas expected to boost efficiencies and protect the operations from future diesel price volatility.




“My enthusiasm hasn’t dampened one iota… I think there are enormous benefits,” AngloGold Australia senior vice-president Mike Erickson said.




“It is a long-term project. Yes, the diesel price has dropped considerably and yes, it may well be difficult to get it across the line if you were to put it up today based on this diesel price.




“I still hold the view that this is an enabler to expanding production, expanding operations, [and] potentially doing other things with the gas.”




Operations expansions could include elements of Tropicana’s processing plant, which is currently undergoing debottlenecking investigations.




“If you were to double the size of the plant, gas is definitely the way to go, because if it was diesel you’d just be hauling in more and more trucks,” Erikson said.




“The way it works, the price [of gas] becomes cheaper with increased volumes through the pipeline.”




With both mines running on 100% gas with diesel backups, truck movements to the sites are expected to drop from 1900 to 450.




There is also talk of introducing liquefaction to drive LNG-powered truck fleets onsite.




“The technology is well and truly understood and others are doing it elsewhere,” Erickson said.




For APA Group, the pipeline extension could represent future contracts for emerging projects in the region.




Gold Roads Resources’ Gruyere gold project lies north of Tropicana, while Vimmy Resources wants to develop WA’s second largest uranium resource 83km south of its nearest point on the pipeline.




“Build it and they will come,” APA Group managing director Mick McCormack said.




“Whilst AngloGold Ashanti are the primary customer here, there are benefits, hopefully, for all concerned in due course.”




Minister Marmion said the pipeline was a major milestone.




“This is a game-changer for the area, with eight operational or proposed projects in line to benefit, potentially employing 3000 people,” he said.




“While Sunrise Dam and Tropicana gold mines will reap the rewards of dependable, cleaner fuel, some of the State’s most exciting new gold, uranium and rare earths ventures are now within reach of the gas network.”



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