The Asia Miner

JAN-MAR 2019

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

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the asia miner • volume 16 • issue 1 23 REGIONAL FOCUS: Central Asia & Mongolia need to be placed nearby and transferred into road-trains for haulage to Bayan Khundii. PROCESSING The PEA study assumes processing of ROM material via a convenঞonal gravity separaঞon circuit and a carbon in pulp plant. The ore-processing plant will be located adjacent to the Bayan Khundii open pit and throughput will target 600,000 tonnes per year, nominally 1,800 tonnes per day. Total mineralised material processed in the plant over the course of the mine life is 4.6 million tonnes at an average diluted head grade of 3.42 g/t gold. Using an esঞmated mill recovery of 82 per cent, total recovered gold over the Project life is 412,000 ounces. Ore from the Bayan Khundii deposit is free-milling with an average recovery of 92per cent while the Altan Nar deposit, which includes arsenopyriঞc ore locally with associated low recoveries, will only include the free-milling porঞons of the resource with an average recovery of 62 per cent. OPERATING COSTS Operaঞng costs are based on the mining and processing scenario outlined above and assumes contract mining. All other acঞviঞes are assumed to be owner-operated. The conঞngency is esঞmated at 10 per cent and applied to all cost centres except Royalty and Charges. The all-in sustaining cost (operaঞng cost and sustaining capital cost) is esঞmated at US$714/oz. CAPITAL COSTS The iniঞal capital cost (Year 0), primarily comprising construcঞon of the process plant and supporঞng infrastructure, is esঞmated at US$32 million. The PEA incorporates the use of a mining contractor uঞlising mining equipment which, if purchased outright, would add US$38 million to capital costs for the life of the mine. All major faciliঞes including the process plant are proposed to be located at the Bayan Khundii site. In Year 3, the supporঞng infrastructure for the Altan Nar site is constructed at an esঞmated cost of US$1 million, including the upgrade of the road to Bayan Khundii. The infrastructure and process plant esঞmates include a 20 per cent conঞngency. Sustaining capital of US$3 million is included in the mine plan and mine closure costs are esঞmated at US$4 million. Total capital expenditures over the life of mine are esঞmated at US$40 million. Erdene iniঞated the Mining License applicaঞon process for Bayan Khundii earlier this year. Experts have been appointed by the Mineral Council to review and approve the applicaঞon, and Erdene has provided the necessary informaঞon in support. Experts will be complete a site visit prior to the Mineral Council meeঞng anঞcipated in Q1 2019. The Altan Nar filing will take place in early 2019. It is esঞmated that the Project can advance through the final permiমng approvals, feasibility and project finance by early 2020. At that stage, the Company anঞcipates being in a posiঞon to complete construcঞon and commence producঞon within a year.

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