Engineering & Mining Journal

MAR 2014

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20 E&MJ; • MARCH 2014 www.e-mj.com REGIONAL NEWS - ASIA Centerra Completes Öksüt PEA, Kumtor Ownership Talks Continue Centerra Gold has completed a preliminary economic assessment (PEA) of its 100% owned Öksüt project in south-central Turkey. The PEA envisions a conventional open-pit and heap leach facility with an expected total of 34 million mt of ore to be stacked at a maximum rate of 11,000 met- ric tons per day (mt/d). Highlights of the PEA, using a $1,300/oz gold price, include: • An 11-year mine life from 2016 to 2027; • Life-of-mine gold production of 893,000 oz, with average production of 125,000 oz/y in years 4 through 6; • Total construction capital and pre-pro- duction costs of $166 million; • All-in production costs, including taxes, of $914/oz; and • Payback of construction capital and pre- production costs expected 4.5 years after production begins. The Öksüt project is based on the Keltepe and Güneytepe gold deposits. The resource estimate used as the basis for the PEA consists of indicated mineral resources from the Keltepe deposit of 29 million mt grading 1.2 g/mt gold for 1.1 million contained oz of gold and inferred mineral resources from the Güneytepe deposit of 4.7 million mt grading 0.9 g/mt gold for 134,000 contained oz. The PEA assumes mining of two open pits by a local mining contractor. Over the life of the mine, mining costs are estimated to average $2.77/mt mined, processing costs are estimated to average $4.00/mt processed, and administrative costs are estimated at about $9 million/operating year. To account for mining dilution and losses during mining, the mineral resources have had a 95% factor applied to the gold grades and are constrained by an optimized pit shell, a gold price of $1,300 /oz, and an overall metallurgical recovery of 77%. turing: In other news, Centerra reported on February 6, that the parliament of the Kyrgyz Republic had adopted a resolution after completing a review of a previously announced non-binding heads of agree- ment among Centerra, the government of the Kyrgyz Republic, and Kyrgyzaltyn JSC in connection with a potential restructuring transaction. In the transaction, Kyrgyzaltyn JSC would exchange its 32.7% equity interest in Centerra for a 50% interest in a joint-venture company that would own the Kumtor gold mine. Kyrgyzaltyn JSC is a joint-stock compa- ny wholly owned by the Kyrgyz Republic. The Kumtor mine is located in the Tien Shan Mountains 350 km southeast of the Kyrgyz capital of Bishkek and accounts for about 12% of the country's GDP. Centerra is forecasting that the mine will produce 550,000 to 600,000 oz of gold in 2014 at all-in costs of $833 to $909/oz. Potential restructuring of Kumtor own- ership has been the subject of discussion and some disagreement within the Kyrgyz government since September 2013. "Any definitive agreement for a poten- tial restructuring remains subject to required approvals in the Kyrgyz Republic, including Government and Parliament of the Kyrgyz Republic, as well as Centerra Special Committee and Board approval, and compliance with all applicable legal and regulatory requirements and approvals, including a formal independent valuation and shareholder approval." Eldorado Gets Investment Support for Eastern Dragon Project in China CDH Investments, a leading Chinese pri- vate equity company, is acquiring a 20% interest in Eldorado Gold's Eastern Dragon project in Heilongjiang province, northeast China, for $40 million in cash. Following a new share issuance, CDH will own a 21.05% interest in Sino Gold Tenya (HK) Ltd., Eldorado's wholly owned Hong Kong subsidiary, which indirectly holds the com- pany's 95% interest in Eastern Dragon. Eastern Dragon has been on care and maintenance pending receipt of outstand- ing permit approvals. Eldorado anticipates that CDH's participation will assist in the completion of development and advance- ment of the project to full production. Eastern Dragon is based on a high- grade, epithermal, gold-silver vein deposit. Eldorado plans to start operations as a small open-pit mine and then move to underground mining, using carbon-in- leach methods to produce gold doré. Eastern Dragon has proven and pro- bable gold reserves of 764,000 oz, meas- ured and indicated gold resources of 852,000 oz, and inferred gold resources of 190,000 oz. Production is estimated at 70,000 oz/y of gold, over an expected mine life of 11 years. Capital cost to complete development is estimated at $45 million. Eldorado Gold currently operates three gold mines in China: Jinfeng, Tanjianshan and White Mountain. Location map of Centerra Gold's global property and mine assets. (Continued on p. 26) EMJ_pg04-27_EMJ_pg04-27 3/3/14 10:32 AM Page 20

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