Tanzania-focused gold producer African Barrick Gold (ABG) has raised its reserves estimate at the Bulyanhulu Upper East Project as it continues to expand the project.

The company said that the acceleration of mining of the Upper East Zone at Bulyanhulu has continued and it has received approval to begin the ordering of certain long lead items for the project.

The project was previously solely based on the 1.2m ounces (Moz) of reserves located in Reed 1 but it has now completed a scoping study to incorporate the 0.9m ounces of gold in reserves in Reef 2.

The incorporation of Reef 2 is said to significant enhance the project economics, driving a post-tax internal rate of return (IRR) of 34% at $1,700 per ounce.

As a result, the project is thought to need around $100m of pre-production capital to be spent in 2013 and 2014 and is planned to deliver life of mine production of 1.86Moz over the next 20 years.

ABG's Chief Executive Officer Greg Hawkins said: "One of our key aims for this year is to progress the expansion of Bulyanhulu in order to accelerate the realisation of the value provided by the scale of the reserve base. In May we received board approval for the CIL expansion, and we have now successfully expanded the scope of the Upper East Project whilst maintaining our planned timeline for first production.

"With the two expansion projects, we now have a clear path to increasing production levels at Bulyanhulu towards 400,000 ounces per annum over the coming years."

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