AngloGold, which expects to merge with Ghana's Ashanti Goldfields, could plough up to $1 billion into the Obuasi mine, a potential jewel among the merged group's assets.

The investment, which equals the value of the $1.1 billion merger agreement between AngloGold and Ashanti, would represent one of the largest single foreign investments made in Ghana's mining sector to date.

Jonathan Best, the finance director at AngloGold, said in an interview from New York that the Obuasi Deeps project would be way north of $500 million, closer to $1 billion.

AngloGold and Ashanti agreed on Tuesday to the terms of the merger after Lonmin, with a 27.6 percent stake in Ashanti, agreed to the deal.

That leaves only the Ghanaian government, holder of 16.9 percent of Ashanti's share capital and the deciding golden share, to back or block the deal that would create a 7.3 million-a-year gold producer.

The Obuasi mine is Ghana's largest and oldest, with a 100 years of gold mining producing about 27 million ounces of gold but the mine requires significant capital outlay to boost production beyond its stalled 500 000 ounces a year .

Ashanti reported last week that Obuasi's gold production for the second quarter to June fell 10 000 ounces short of its annualised target at 125 447 ounces, produced at $202 an ounce.

The main growth project in the Ashanti portfolio and key to AngloGold's longer-term ambitions, the Obuasi Deeps project will deepen the 1 500-metre mine to 3 000 metres.

The life of the mine could potentially be extended to 2040. From there the mine could tap into a 2 million or 3 million ton resource with an average grade of 15 grams a ton, adding another 1.2 million ounces to its production.

Best said the merged group was planning to pour $290 million into Ashanti assets over the next five years as part of the recapitalisation of the operations.

"That's $110 million more than Ashanti has planned to spend," Best said.

Shares in AngloGold closed 55c firmer at R241.55 yesterday.