A new gold processing plant being constructed at Bulyanhulu gold mine in Tanzania is expected to boost the mine's gold output by increasing recovery rates, the mine's improvement manger said in statement obtained by Dow Jones Newswires Wednesday.

In the statement, Mark Somlyay said the $27 million plant will add up to 20,200 ounces of gold to the mine's current production.

The new plant also aims to improve gold recovery rates from ore grades at the mine, Somlyay said, which has been losing up to 10% of its gold annually due to inadequate gold recovery equipment.

Construction of the plant will be completed by the end of the first quarter 2007. In 2005, the mine produced 311,000 ounces of gold at total cash costs of $358 an ounce.

According to the mine's owner, Canadian-based Barrick Gold Corp. (ABX), Bulyanhulu is currently recovering gold through a flotation plant, which is applied to recover gold, silver and copper residue after gravity recovery.

Data from Barrick indicates that at the time of acquisition in 1999, the mine's proven and probable mineral resources were estimated at 3.6 million ounces of gold. Barrick has significantly improved gold reserves at the mine and by the end of 2005 Bulyanhulu had 10.7 million ounces of proven and probable gold reserves. Drill results to date indicate that grades improve at depth.

Barrick also owns North Mara Gold Mine in Tanzania and has a 75% stake in Tuliwaka gold mine.