The Asia Miner

OCT-DEC 2015

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

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50 | ASIA Miner | October-December 2015 Central Asia CENTRAL Asia Resources (CVR) has received frst funds from the sale of its 90% interest in the Dalabai Gold Project in southern Ka- zakhstan. The purchaser of the operating project is private Kazakh entity Uroven OMP LLP. Legal documentation for the sale of CVR's subsidiary companies associated with Dalabai has progressed and includes a service agreement for Uroven to operate the project until fnal transfer of subsidiary company ownership is made. The free foating of the Kazakh currency and immediate devalua- tion on August 20 had no impact on the terms and conditions of the sale, which is valued at a total of Aus$6.9 million. A payment of US$95,000 was made in late August from which some legal and corporate advisory fees were subtracted in Kazakhstan. Net funds of Aus$77,000 were received in Australia shortly after. Total funds anticipated are: • Dalabai debt, including bank debt, as at July 15 of US$2.6 mil- lion (Aus$3.46 million); • Gold loan repayments of 1480 ounces of gold valued at approx- imately Aus$2.3 million using gold price of Aus$1550/ounce. The loan was established in 2013 and 2014 between the com- pany and a private entity, West Asia Minerals Ltd; • A cash payment of US$300,000 (Aus$400,000) upon execu- tion of a formal sale and purchase agreement; • A payment of US$200,000 (Aus$266,000) upon commence- ment of gold production if production commences by Septem- ber 15, otherwise on December 15, 2015; and • A 1% gross royalty from Dalabai production, capped at US$360,000 (Aus$480,000) commencing January 1, 2016 and paid during 2016 and 2017. Mining at Dalabai, which is about 2.5 hours by road from Almaty, began in July 2014 but was halted in October 2014 due to de- lays with debt funding from Halyk Bank. During the June quarter of 2015 CVR's care and maintenance team was replaced by a Halyk Bank-funded team. Under a court order, December quarter production amounting to 144 ounces of gold and 1126 ounces of silver was sold and pro- ceeds of US$190,000 were disbursed to CVR's Dalabai employees for salaries owed. Remaining Dalabai employees were made redun- dant at the end of May. CVR retains the Altyntas project, which includes the Altyn Tas, Kepken and Kengir prospects. In late May an application for a three year extension of the Altyn Tas exploration licence was formally granted with an expenditure commitment of US$235,000. This al- lows CVR to move forward with exploration and development of Altyn Tas, Kepken and Kengir deposits. SIGNIFICANT wide gold and copper inter- sections have been returned from each of the frst fve drill holes in a 2500 metre di- amond drilling program at Tengri Resourc- es' Taldybulak Gold and Copper Project in the Kyrgyz Republic. Results have also confrmed that gold and copper grades in- crease with depth. One hole targeted deeper potential mineral- ization of the highly prospective sheeted vein system in the gold-rich core of the deposit. The hole ended in high grade gold of 2.84 grams/tonne and copper of 0.5% at 315.1 metres in depth. This hole intersected 53.1 metres from 262 metres @ 2.46 grams/tonne gold, 0.31% copper and 85 grams/tonne molybdenum for 2.97 grams/tonne gold equivalent, including a higher grade zone of 22.2 metres @ 3.52 grams/tonne gold and 0.44% copper. Other results include 220.6 metres from 30.7 metres @ 0.60 grams/tonne gold, 0.20% cop- per and 144 grams/tonne molybdenum; 97.5 metres from 11 metres @ 0.36 grams/tonne gold, 0.15% copper and 79 grams/tonne mo- lybdenum; 87.4 metres from 123.6 metres @ 0.62 grams/tonne gold, 0.10% copper and 100 grams/tonne molybdenum; 184 metres from 17 metres @ 0.31 grams/tonne gold, 0.29% cop- per and 157 grams/tonne molybdenum; and 21 metres from 185 metres @ 1.38 grams/tonne gold, 0.11% copper and 33 grams/tonne mo- lybdenum. Tengri has conducted drilling campaigns in 2014 and 2015 which have delineated a sheeted vein system in the core of the large porphyry gold‐copper deposit. The system hosts signifcantly higher gold and copper grades than the global Taldybulak resource average. Tengri's phase 1 mining plan will consist of mining the upper part of the sheeted vein domain and phase 2 will be the extension of phase 1 incorporating the ore at depth and ore supplied from nearby Andash deposit. Tengri executive chairman Gary Lewis says, "The intersection of high‐grade mineralization provides further evidence of the effectiveness of our phased development program. Our pri- ority remains completing the scoping study for phase 1 this calendar year. "Phase 1's open pit and mid‐level mine and mill throughput will aim to mitigate capital and operating risk, underpin infrastructure and community development and engagement, and provide solid economic returns. Thereaf- ter we will be well placed to execute a seam- less expansion to phase 2. "The mine plan incorporates an expanded open pit mine and increased mill throughput, and the discovery of deeper higher grade gold and copper mineralization presents a potentially viable option for low-cost underground bulk mining to greater depth to access higher grade material." Dalabai project sold to Kazakh company Drilling at Tengri Resources' Taldybulak project in the Kyrgyz Republic. Taldybulak grades increase at depth

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