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REGIONAL NEWS - ASIA Kinross Starts Construction at Dvoinoye Tolgoi complex had advanced to 82.2% complete at the end of April. Mining and stockpiling of the first ore from the pro- ject's phase-one Southern Oyu open-pit began in late April. Construction remains on track to meet the project's targeted start of initial production in the second half of 2012, with commercial production pro- jected to begin in the first half of 2013. A copper concentrator, with related facil- ities and necessary infrastructure to support an initial throughput of 100,000 mt/d, is being constructed to process Southern Oyu ore. The concentrator was 84.7% complete at the end of the first quarter. Kinross Gold's Dvoinoye gold mine, shown here during construction, is expected to produce between 215,000 - 250,000 oz/y of gold equivalent over its first three full years of operation. (Photo courtesy Kinross Gold) Kinross Gold has started construction at its Dvoinoye underground gold mine proj- ect, located about 100 km north of its Kupol gold operations in the Chukotka region of far-east Russia. The Dvoinoye mine is expected to produce 1,000 mt/d of ore to be shipped to the Kupol mill, which will be expanded to process approximately 4,500 mt/d. Gold equiva- lent production from Dvoinoye ore for the first three full years of operation is expected to average between 215,000 and 250,000 oz/y, providing total expect- ed production from Kupol of 650,000 to 700,000 oz/y. Dvoinoye is scheduled to deliver its first ore to the Kupol mill in the second half of 2013. Life-of-mine production is expected to total approximately 1.1 mil- lion oz of gold and 1.14 million oz of sil- ver. The Dvoinoye reserve will be mined using underground mechanized equip- ment, similar to the operation at Kupol. Life-of-mine ore production will total about 2.1 million mt of ore at grades of about 17 g/mt gold and 21 g/mt silver. Recoveries are expected to average 94% for gold and 80% for silver. The project has an estimated mine life of seven years. Capital expenditures to develop the Dvoinoye project are estimated at $370 million, including $175 million for infrastructure construction and upgrades to the Kupol mill. The Dvoinoye feasibility study envi- sions mining costs of about $80/mt, pro- cessing costs of about $50/mt, and 42 E&MJ; • JUNE 2012 trucking costs of about $35/mt. Total life-of-mine production cost of sales per gold equivalent ounce is expected to be in the range of $575 to $600, based on an oil price of $90/bbl, gold royalties of 6%, silver royalties of 6.5%, and a cor- porate income tax rate of 20%. Going forward, Kinross will report Dvoinoye and Kupol results as a com- bined operation. As of the end of the first quarter of 2012, surface infrastructure construc- tion at Dvoinoye was about 16% com- plete, and underground development was about 23% complete. Earthworks and roads for site facilities, including the per- manent camp, were largely complete. Construction of the all-season road between Dvoinoye and Kupol was pro- gressing well, with 32 km of the total 84 km completed. Surface construction activities will peak this summer. Ivanhoe Mines Will Change its Name Ivanhoe Mines announced in mid-May 2012 that the company will propose and recommend that shareholders approve a resolution to change the company's name from Ivanhoe Mines Ltd. to Turquoise Hill Resources Ltd. at its 2012 annual general meeting of shareholders, scheduled for June 28, 2012. Turquoise Hill is the English translation of the name of the com- pany's Oyu Tolgoi copper-gold-silver project in the South Gobi region of Mongolia. Ivanhoe also reported that overall con- struction of the first phase of the Oyu In conjunction with the surface activ- ities, an 85,000-mt/d underground block-cave mine is being developed at the Hugo North deposit. As of mid-May the headframe for the underground mine had reached a height of 78.5 m and was approaching its planned final height of 97 m. Shaft-sinking had reached a depth of 224 m below surface. The underground mine is scheduled to begin operations in 2016. Throughput capacity of the concentrator will be expanded to 160,000 mt/y to process ore from both the open-pit and underground mines. The concentrator expansion must be in place by 2018 to meet the increas- ing tonnage available from underground production. Work is ongoing to ensure that electri- cal power from China will be available for the start of production at Oyu Tolgoi. Ivanhoe anticipates that construction of all transmission infrastructure necessary to import power from China will be com- pleted by July 2012. Long-term sales contracts have been signed on a substantial portion of Oyu Tolgoi's total concentrate production. Most of the concentrate initially pro- duced at Oyu Tolgoi is expected to be delivered to customers in China. Tongling Signs Purchase Agreement for Nautilus China's Tongling Nonferrous Metals Group has signed an agreement to pur- chase 1.1 million mt/y, subject to a plus or minus 20% variation, of material mined by Nautilus Minerals at its Solwara 1 seafloor mining project in the Bismarck Sea, Papua New Guinea. Tongling will process the material into a www.e-mj.com