Abstract
M.Ing. (Engineering Management)
Historically, gold is a valuable metal that constitutes a long term solid investment avenue. For that reason, researchers and investors refer to gold as a safe haven. Gold markets have been very unpredictable in the course of the most recent years, particularly since 2007 when the late financial crises started. Various factors such as the financial, political, and social conjunctures greatly impact the gold prices. On September 6, 2011, for the first time the price of gold went up to 1895 USD in London. In the last four years however, the price of gold has shown a downtrend mainly after 2013. The average price of gold came from USD 1, 669 in 2012 to USD 1, 160.1 last year.
This drop of the price of gold on the international market has a direct impact on the Net Present Value (NPV) of the gold mining companies. This is especially true for the newly developed mining projects which have to cut down their production costs in order to optimize their benefit margins. Mining projects are capital intensive and practically irreversible endeavors with long, but often limited economic duration. Mining companies that evolve in the gold sector strive to find ways to optimize their benefit margins by cutting down their operating costs.
This research paper focuses on a newly developed gold mine operating in the Democratic Republic of Congo (DRC), Twangiza Mining (TM), subsidiary of the Canadian Banro Corporation. TM started its commercial production in 2012 but its processing plant faced many hurdles to cope up with the clay ore in the Twangiza area. Initially designed to process 1.3 millions of tonnes per annum (Mtpa), after many failures to reach its yearly ore throughput as per design ore throughput, TM launched a project to optimize and expand the processing plant capacity to 1.7 Mtpa and the gold production to 110, 000 ounces (oz) per annum. Moreover, the project, named TM Optimization and Expansion Project (TMOEP) aimed to increase the plant recovery to 85-90 %. In brief, TMOEP aimed to optimize the company’s overall return on investment by cutting down its operating costs.