Russian Ministry of Natural Resources announced its plans to stimulate early-stage exploration works as the domestic producing companies are generally unwilling to undertake risks. The Ministry announced that it is to create a holding company called Rosgeologiya, which will incorporate 50 expeditions in all parts of the country, remaining under government control since massive privatization of the 1990s. On the corporate front, Polymetal and Polyus Gold made acquisitions, which brought them to the Central Asian republics, Turkey and Romania.
Polyus Gold re-announced its plans to increase gold production 2.2-fold to 2.9 million ounces with the total investment of US $1.67 billion. Similar plans aiming to produce 3.3 million ounces by 2009 were announced by the company back in 2004 without mentioning specific projects. This time, the company announced how it is going to achieve its new goal. In Krasnoyarsk, Polyus completed construction at Titimukhta and completed reconstruction of the nearby Olympiada plant. In the same area in 2010, Polyus will commence operations on the Blagodatnoe deposit with the capacity of processing 6 million tonnes of ore annually to produce 12 t of gold (400,000 oz). Investments will amount to US$400 million. In 2011, it plans to start operation of the Verninskoe deposit (Irkutsk) to produce 6t of gold (200,000 oz) with investments of US$250-270 million. In addition to Verninskoye, Polyus is planning to maintain production at Zapadnoye, a western satellite of Sukhoi Log, until 2017-2018. By 2011 Zapadnoye will process up to 0.8 million tonnes (Mt) ore. In 2013, it plans to commence operations on the Natalka gold deposit (Magadan), with the total cost of around US$1 billion. There is also a joint project with Canadian Kinross Gold on the Nezhdaninskoe deposit in Yakutiya and ongoing consolidation process of the Kazakh Gold assets.
Severstal, widely viewed in Russia as a company willing to repeat the fate of Polyus, continued its fight for High River Gold. After consolidating 61.7% of the shares, Severstal faced resistance from minority shareholders. This was resolved through the listing of additional 150 million shares on TSX and dilution of the remaining shareholders. The shares were issued to Polenica Investments, part of the Moscow-based Troika Dialogue group. The new shares will constitute 23.1%. One can remind that Severstal’s gold assets also incorporated what was previously held by Celtic Resources in Kazakhstan and Arlan Group in Russia. This propelled Severstal into a guild of top 10 gold producers, albeit with modest resource base and production in comparison with international standards.
SIBERIA, RUSSIA
Central Asia Gold is carrying out mining and exploration for gold through Tardan Gold (Tuva) and GRK Tomano (Irkutsk Oblast). Costs of geological exploration in Q1 2009 came to US$621,900. The company expects to increase its C1+C2 reserves from 0.8 million ounces (at present) to 1-1.2 million ounces (by end-2009).
In Krasnoyarsk, Norilsk Nickel suspended all works at the Kingash Ni-Cu deposit. Pre-crisis plans were to construct a plant with production of 60,000-70,000 tonnes of nickel, 25,000-30,000 tonnes of copper, 10,000-15,000 tonnes of PGE+gold.
Lunsin (controlled by Zijing Mining Group) intends to complete construction of the mining and beneficiation complex at the Kyzyl-Tashtyg polymetallic deposit in Tuva by 2011. Production capacity of the plant is 1 Mtopa (million tonnes of ore per annum). The main saleable products are lead, zinc and copper concentrate. The plant will reach its design capacity one year after its completion in 2011, with total investments over US$200 million. Open pit and underground mining will span over 14 years. The deposit hosts zinc, lead, copper, barium and sulphur, with by-product gold, silver, cadmium, selenium. B+C1+C2 reserves of polymetallic ore amount to 12.92 Mt, C2 reserves of copper ore is 2.07 Mt, C1 category of pyrite ore reserves is 6.26 Mt.
In Irkutsk, Polyus Zoloto continues to invest into the geological exploration in the Irkutsk Region: 665.5 million in 2006-2008 and 229.4 million in 2009. Upon completion of the project design, Chertovo Koryto may see a plant construction with the capacity of 2.2-4Mt ore.
Metropol Group of Companies commenced stripping at the Ozernoye polymetallic deposit situated in Buryatiya. Starting from 2013, it plans to produce 740,000 t of zinc concentrate, 110,000 of lead concentrate, up to 100 t of silver, and around 60,000 ounces of gold; total investments stand at over US$1.33 billion. Metropol has already invested over US$100 million. After 2012, Metropol plans to make an IPO of the Ozerny Mine at one of Asian stock exchanges. This is a change to initial plans, after, Lundin Mining sold its 49% stake for US$35 million back to Metropol in the end of September 2009. JORC compliant reserves of 157Mt of sulphide ore contain 5.2% of zinc, 1% lead. Gold reserves are 0.8 million ounces. Nazarovskoye deposit is situated in close proximity to Ozernoye, with C1+C2 resources of 5.9Mt of gold-sulphide-zinc ore and P1 – 6.8Mt to contain 465,000 tonnes of zinc (7.84%); 0.9 million ounces of gold (grading 0.8 to 2g/t).
Highland Gold Mining Ltd (51.7%) and JSC Kazzinc (48.3%) have commenced operations on the Novoshirokinskoye polymetallic deposit, situated in Zabaikalskiy Krai, with annual production of 20,000-28,000 t of lead concentrate; 8,000-9,000 t of zinc concentrate; 35,000-40,000 ounces of gold; 700,000-800,000 ounces of silver. By the end of 2009 the company will carry out capacity testing and mine approximately 30,000 t ore. Mining will go up to 280,000 t in 2010. The plant will reach its design capacity of 450,000 tpa by 2011. Novoshirokinskoye ores contain 4.11% lead, 1.82% zinc, 5.55 g/t of gold, and 101.9 g/t silver.
Also in Zabaikalie, Highland Gold Mining has announced results of geological exploration at the Lyubavinskoye deposit. Resource estimation for this area is 1.6 million ounces, with C1+C2 categories of 0.6 million ounces. The average grade is 1.7g/t of gold (0.75g/t cutoff).
In the same area, there are several new developments. Norilsk Nickel has calculated resources of the Kultumin deposit to contain 0.26 million ounces of gold in С1 and 3.7 million ounces of gold in С2 category; 2.4 million ounces of silver in C1 and 29 million ounces silver in С2 category; 37,000 t copper in C1 and 550,000t of copper in C2 category; with 9.94Mt of iron ore in C1 and 170.96Mt in C2. Daltsvetmet (owned by Maxim Finsky, former director of Norilsk Nickel) has announced Russian style resources for the Nasedkino deposit: 0.7 million ounces of gold (С1+С2), and 1.7 million ounces of gold in Р1+Р2. Development of this project requires construction of a 1.25 Mtpa plant to produce only 0.08 million ounces gold per annum. Russian-Chinese Ferrum has calculated resources 0.3 million ounces gold and 0.8 million ounces silver at the Luginsky deposit. At the Archikolskoye deposit, Armed calculated 0.28 million ounces gold in C2. Zhelezny Kryazh has got C1+C2 reserves of 0.33 million ounces gold on the name sake deposit. Omchak has secured 0.08 million ounces of gold at the Verkholinskiy deposit.
FAR EAST, RUSSIA
Polyus Zoloto submitted to GKZ new reserves evaluation for the Nezhdaninskoe gold deposit in Yakutia. B+C1+C2 categories contain 20.2 Million ounces Au, a 32% increase on the Soviet evaluation. Average grade is 4.89g/t Au for largely an underground development. Planned production is 400 koz Au per annum. Investments required are US$1billion.
Fortress Minerals Corp has acquired 51% of shares in Amur Minerals LLC (daughter company of Freeport-McMoRan) in the Khabarovsk Krai. Under the terms of the deal, Fortress will take over operational control of Amur Minerals and will complete drilling of total 12,000m on all three Cu-Au prospects.
Highland Gold Mining expects that the Mnogovershinniy deposit (Khabarovsk) reserves will increase by 190koz Au. Total reserves of Mnogovershinniy (as of the beginning of 2009) have stood at 83.2tAu in 8.76Mt ore with the average grade of 9.5g/t. By the end of 2009 the company will complete 5000m of drilling.
In Magadan, Polyus Zoloto plans to complete FS of the commercial development of the Natalka deposit by the end of 2009. By the end of 2010, Arlan plans to commission a plant at the Pavlik deposit with the capacity of up to 2Mt ore annually. The y secured a bank loan of US$150 million. Maximum production will be around 96koz Au per annum, with average grade of 3.5g/t. Pavlik is situated close to Natalka. The deposit contains around 1.8Million ounces Au (C1+C2) with the average grade of 2.8g/t. Geologists see the potential of increasing reserves to 10-16 million ounces.
KAZAKHSTAN
Polymetal completed acquisition of 100% in Varvarinskoye gold-copper mine in Kazakhstan from Orsu Metals Corp.
Central Asia Resources Ltd has commenced drilling of 3,500m at the Altynas deposit. As of June 2009, resources of the deposit stood at 16.5Mt with the average grade of 1.14g/t of gold and total of 608,232 oz of gold. At Dalabai, the company is planning to complete resource calculation by end 2009. The expected resource is just under 2 million ounces.
Kazakhmys Plc and Social & Business State Corporation “ЕрТiс” will create a joint venture to develop the Anisimov Klyuch polymetallic deposit in Altay.
KYRGYZSTAN
With the aim of financing and co-financing priority projects, such as Taldy-Bulak Levoberezhnyi and Jerooy, Kyrgyz government has created a Development Fund of the Kyrgyz Republic. Centerra Gold Inc applied for the Taldy-Bulak Levoberezhnyi license. Its C1+C2 reserves stand at 2 million ounces; with C2 reserves of 1.45 million ounces of silver.
Polyus Zoloto, ALROSA, Centerra Gold Inc, and Gold Fields are reviewing the geological data on the Jerooy gold deposit. 100% of Jerooyaltyn (40% Kyrgyzaltyn + 60% private investors) were already transferred to the Development Fund. To secure transparency of the deal and to attract qualified investors, the Development Fund planned to hold public offering of Jerooyaltyn shares at the stock exchange market in the Kyrgyz Republic. The deposit contains 2.4 million ounces with the grade of 6.3g/t of gold.
Kentor Gold has signed an option agreement with Aurum Mining plc to buy 80% in Andash Cu-Au porphyry deposit. Upon completion of the deal in the beginning of 2010, Aurum will receive US$10m from the sale of its share in Andash and US$5m from its service assets. Further on, Aurum plans to buy out 10% in the project from its local partner for US$1.2m. As a result of transaction, Andash will be 80%-owned by Kentor Gold, with 10% Aurum Mining and 10% Kyrgyz partner.
At Talas JV, exploring Taldybulak Cu-Au porphyry, Gold Fields completed 22,013 meters of drilling since the commencement of the JV programme with Orsu Metals Corp.
UZBEKISTAN
Oxus Gold is studying the market in order to attract additional investments into the Amantaytau Goldfields project (50% Oxus Gold, 40% Uzbekistan Goskomgeo, 10% Navoi GMK). In 2010, it is planned to start modernisation of the existing gold processing plant and installation of production lines to process sulphide ore. Oxus reserves in oxide ore is 340,000 ounces of gold, 4.5 million ounces of silver; and 2.1 million ounces of gold and 77,000 ounces of silver in sulphide ore.
TAJIKISTAN
Government of Tajikistan officially announced the tender on the Bolshoy Kanimasur silver deposit, situated some 30km southeast from the giant Kalmakyr copper-gold deposit (Uzbekistan). Companies from Russia, China, Turkey, Canada and Kazakhstan have expressed an interest. This project would require around US$2billion investment. It will also require relocation of the Adrasman village which is situated on top of the deposit. Bolshoy Kanimasur had been explored in 1970-s and 1980-s and its reserves total to 1,000 million tonnes of ore with 49g/t silver, 0.49% lead and 0.38% zinc. Total reserves exceed 1.575 million ounces of silver.
President of Tajikistan has also authorised tender preparations for the Shahbas gold deposit. The deposit is situated 12km from the Taror gold deposit.
Kryso Resources Plc reported JORC-compliant resources at the 100%-owned Pakrut gold project, to contain 2.83 million ounces of gold. The project is situated 112km northeast of Dushanbe. A bankable feasibility study is currently being undertaken by the Beijing General Research Institute of Mining & Metallurgy to be completed before the end of 2009.
Russian Ministry of Natural Resources announced its plans to stimulate early-stage exploration works as the domestic producing companies are generally unwilling to undertake risks. The Ministry announced that it is to create a holding company called Rosgeologiya, which will incorporate 50 expeditions in all parts of the country, remaining under government control since massive privatization of the 1990s. On the corporate front, Polymetal and Polyus Gold made acquisitions, which brought them to the Central Asian republics, Turkey and Romania.
