The Asia Miner

JAN-FEB 2017

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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36 | ASIA Miner | Volume 14 • Issue 1 | 2017 Central Asia CENTRAL Asia Metals (CAM) is acquiring an 80% interest in the subsoil use contract for the Shuak copper exploration property in northern Kazakhstan from local company GRK-Aksu. CAM intends to invest US$2 million in exploration activities. Shuak, which is in Akmola Oblast, about 300km north of the cap- ital Astana and 40km northeast of the regional centre Stepnogorsk, has a Pre-GKZ (State Commission on Mineral Reserves) resource of 327,000 tonnes of contained copper at a grade of 0.66%. The li- cence area is 197sqkm and contains three target areas that warrant immediate and detailed exploration for copper and gold. The property was explored between 1973 and 1991, with histor- ic work including geochemistry, geophysics, trenching and drilling. During this time, more than 45,000 metres of diamond holes were drilled and resource estimation to historic Soviet standards was un- dertaken, which demonstrated a pre-GKZ resource at Mongol V, CAM's priority copper oxide exploration target area. In quarter two CAM intends to commence field-based explora- tion work, predominantly at Mongol V. During the 2017 exploration season, the company plans to design an 1800 metre trenching program and to undertake approximately 8000 metres of drilling at Mongol V and other priority areas. The 2017 exploration budget for Shuak is approximately US$1 million. CAM business development director Gavin Ferrar said: "We are delighted to have agreed terms to acquire a majority stake in Shuak, which we have identified as an attractive opportunity given its loca- tion and economic prospects. We believe the project can be rapidly appraised to ascertain its copper oxide resource potential. "Given our success to date at Kounrad, our initial target would be to develop another similar SX-EW operation at Shuak. Longer term, we also plan to explore the primary copper porphyry target at depth." During the 2016 September quarter CAM achieved record copper cathode production of 4102 tonnes from Kounrad, up from 2966 tonnes in the third quarter of 2015. This included record monthly production of 1503 tonnes during August. Production for the nine months ending September 30 was 11,010 tonnes, up by 31% on the 2015 period. CAM says the Stage 2 Expansion was due to be completed in October, about 25% below budget. Leaching of copper from the Western Dumps will begin in the 2017 second quarter. PRODUCTION of the first saleable copper concentrate from sul- phide ore at KAZ Minerals' Aktogay project in Kazakhstan is expect- ed by the end of the March quarter of 2017. The AIM-listed compa- ny is also ramping up production at Bozshakol after commissioning of the clay plant. KAZ says that the Aktogay project budget has been reviewed and reduced by $100 million to $2.1 billion. The saving has been achieved through faster than anticipated progress in construction of the concentrator, a partial release of contingency and from the con- tinued benefit of a local supplier strategy and sustained weak tenge. The capital expenditure profile for the project is expected to be approximately $100 million in the second half of 2016, $240 million in 2017 and $370 million in 2018. The 2018 figure includes $300 million of payments relating to work in 2016 and 2017 that was deferred under an agreement with the principal construction con- tractor in November 2015. In early December the company's chief executive Oleg Novachuk said, "We are happy to announce the start of commissioning activi- ties at the Aktogay sulphide concentrator and a further reduction of $100 million in the project budget. We are now focused on ramping up production at Aktogay and Bozshakol to deliver industry-leading copper production growth." KAZ later reached agreement on a new $300 million credit facility with the Development Bank of Kazakhstan JSC (DBK), which will finance completion of the Aktogay project. The company has also announced that an increased commitment by ING Bank NV in the pre-export finance facility (PXF) has been agreed for an additional $50 million. Chief financial officer Andrew Southam said, "We are pleased to have secured a new, long-term facility of $300 million from DBK and to have increased ING Bank NV's participation in the PXF facility by $50 million, ahead of a planned refinancing in the first half of 2017. These transactions demonstrate the group's ability to access diversified sources of finance and the strong support it enjoys from its lenders." Commercial production at the new 25 million tonnes/annum Bozshakol sulphide concentrator was declared in the December quarter after consistent increases in throughput. When output from the new clay plant with annual capacity of 5 million tonnes is added, total ore processing capacity is 30 million tonnes. CAM to acquire Shuak property Copper cathode produced at KAZ Minerals' Aktogay project in Kazakhstan. Aktogay sulphide commissioning begins

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