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Tanzania plans to lift gold output at state-owned mine

18 September 2014, 10:19

Dar Es Salaam -  Tanzania plans to lift gold production at its Stamigold Biharamulo gold mine, formerly owned by African Barrick Gold, to 40,000 ounces next year, almost four times its expected output for 2014.

Stamigold became the first state-owned gold mine in Tanzania, Africa's fourth-biggest gold producer, after the country passed a law in 2010 that allowed the government to own a mining stake.  

Stamigold's parent company said in a statement on Wednesday that production, which restarted last month, would jump from just 10,700 ounces expected this year. The mine produced 44,338 ounces in 2012, and 84,101 ounces in 2011.

"We have started mining a new open pit and extended the life of the mine for three more years," the company's acting managing director, Edwin Ngonyani, told Reuters.

"We are still doing some more exploration work and there is a possibility that the life of the mine can be further extended if we find sufficient gold reserves."

Tanzania's government bought African Barrick's Tulawaka gold mine in November, and renamed it Stamigold Biharamulo. African Barrick sold due to declining gold production, but the Tanzanian government acquired both the mine and some exploration rights in the area to try to boost output.

Total cash costs at the mine, located about 160 km (96 miles) in the country's gold field region near Lake Victoria, are expected to fall to $800 per ounce from the current $920 per ounce, Stamigold said.

Many gold and silver miners have been forced to shelve new projects and slash costs, after prices of the precious metal fell from their 2011 highs.

- Reuters

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