Engineering & Mining Journal

AUG 2018

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REGIONAL NEWS - ASIA 24 E&MJ • AUGUST 2018 www.e-mj.com Polymetal Starts Up Kyzyl Gold Mine Polymetal International has started up its Kyzyl gold mine in northeast Kazakhstan, ahead of schedule and below budget. Kyzyl produced its first gold concentrate on June 25, following completion of all construction and commissioning activi- ties. Polymetal plans to produce 80,000 ounces (oz) of payable gold at Kyzyl in 2018, ramping up to 280,000 oz in 2019 and 330,000 oz per year (oz/y) thereafter at all-in sustaining costs of $500/oz to $550/oz. Polymetal achieved startup of the Kyzyl concentrator one quarter ahead of the original schedule announced in 2014 and one month earlier than its January updated plan. Project capex is expected to come in approximately 3% below the original $325 million budget, inclusive of 62 million mt of pre-stripping. Mining is ongoing at full design capac- ity, and 315,000 mt of ore was stockpiled ahead of startup. The grade-control pro- gram has demonstrated robust reconcilia- tion with the reserve model, with both ore grade and gold contained tracking slight- ly above plan. First concentrate deliveries to offtakers were scheduled for the end of July, and shipments to Polymetal's Amursk pressure oxidation plant in Rus- sia were expected to begin in September. The Kyzyl concentrator is progressing through a three-month ramp-up period, after which it is scheduled to reach name- plate throughput of 150,000 mt/month and recoveries of 86% by October 2018. Kyzyl's JORC-compliant gold reserves are estimated at 7.3 million oz in ore grad- ing 7.7 grams/mt gold. Current planning calls for open-pit mine life of 10 years, followed by 14 years of underground mining. Additional JORC-compliant gold resources total 3.1 million oz in material grading 6.8 g/mt, indicating strong poten- tial to further extend operations. The Kyzyl project is located in a tra- ditional mining region, with good infra- structure and easy access to grid power and a railway. Hod Maden Project in Turkey Targets 200,000 oz/y of Gold Sandstorm Gold has reported summary re- sults of a prefeasibility study (PFS) of the Hod Maden project in northeast Turkey that forecasts production of an average of 200,000 ounces per year (oz/y) of gold and 12,600 metric tons per year (mt/y) of copper in concentrate over a mine life of 11 years. The project is owned 30% by Sandstorm and 70% by Lidya Madenci- lik, which is the operator. All-in sustaining costs at Hod Maden are estimated at $374/oz of gold pro- duced on a co-product basis. Upfront capital costs are estimated at $272 mil- lion. The payback period from the start of production is estimated at 1.5 years. Hod Maden's proven and probable mineral reserves stand at 2.61 million oz of gold and 129,000 mt of copper. Mill throughput is planned at 900,000 mt/y at head grades of 8.9 g/mt gold and 1.4% copper. Sandstorm President and CEO Nolan Watson commented, "Hod Maden was discovered only three years ago and has since made remarkable progress toward production at a pace that few projects in the mining industry could match, and Sandstorm is pleased to be partnered with one of the best Turkish mining operators. "The current financing plan is 65% debt financing, leaving Sandstorm's capi- tal contribution at less than $30 million. The Hod Maden PFS is based on un- derground mining using mechanized methods, including transverse and longi- tudinal longhole open stoping with paste backfill. The main area will be mined from the bottom up in primary and secondary stopes, with a total of 9.1 million mt of ore produced during the 11-year mine life. Ore processing contemplates a sin- gle-stage crush, various stages of milling, bulk flotation roughing, various stages of copper cleaning, and regrind to produce a single copper concentrate containing gold. Concentrate will be transported to Hopa port on the Black Sea in Turkey for shipment to smelters. The mill will be built in the nearby alley to avoid contact with ex- isting roads and housing. A tailings stor- age facility and waste dumps will be lo- cated on surface, as will a main office, a 120-person camp, laboratory, storage, and water treatment facilities. Grid power is available on-site, and some workforce can be based out of the nearby city of Artvin. With the release of the PFS, the Hod Maden project moves into the next stage of development. Lidya Madencilik has ini- tiated the permitting process and is con- currently working on a gap analysis and trade-off studies. A feasibility study will begin by the end of 2018. Construction is tentatively slated to start in fourth-quarter 2020, with first production by early 2022. Alamos Gold Receives Permit for Kirazlı Project in Turkey Alamos Gold reported it has been granted the GSM (Business Opening and Opera- (Continued on p. 29) The Kyzyl concentrator (above) is expected to reach nameplate capacity by October.

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