The world's third-biggest gold producer AngloGold had approved a project to extend the life of its smallest mine to extract $203 million worth of gold at current prices.
The decision to enlarge AngloGold's Navachab mine in Namibia and to extend its life by eight years to 2013, comes after the price of gold rose 13 percent this year, boosting the profit margins of some of the least efficient properties.
The recent sustained improvement in the gold price has made the project viable. Navachab will produce about 80 000 ounces of gold a year - its current rate of production - the statement said. In the three months to June 30, the mine produced metal at a cost of $164 an ounce, a little more than half the current gold price of $316.50.
The mine began production in 1989 and employs more than 300 people. AngloGold did not disclose the cost of the project and company spokesperson, Steve Lenahan, was not immediately available for comment.