Trans-Siberian Gold (TSG) recently held an annual general meeting, in which it was indicated that the appointment of Oleg Bagirov as the new Chief Executive and the potential consolidation of the company’s operations in Far East Russia represent a substantial step change in the company’s efforts to become a profitable gold producer by 2008.
The sale of the company’s projects at Veduga and Bougnay, together with a project financing facility from Standard Bank, will provide the company with the necessary funding for the development of its Asacha gold project. This represents a positive milestone in the company’s objective of bringing the Asacha mine into production by 2008.
Asacha is located in the oblast of Kamchatka, occupying a 1,000 km peninsular in the very far east of Russia. By road Asacha is some 150 km to the south of the port of Petropavlovsk – Kamchatsky, the regional capital. The first 90 km of the road is mostly paved, being the road to the Mutnovskaya geothermal power station. From the turn-off to the site is a 60 km long unpaved all-weather road that has been constructed by the company.
TSG holds a 90.05% interest in Trevozhnoye Zarevo, which holds mining and exploration licences covering both the Asacha (24 km2) and Rodnikova (16 km2) deposits. The company has an obligation to acquire the remaining 9.95% of Trevozhnoye Zarevo for $1million pending a final decision by the board to proceed with the development of a mine at Asacha.
The bankable feasibility study, completed in March 2004, was adjusted in 2005 to be in full compliance with Russian regulations and technical norms. Work has continued on engineering studies, site preparation and in completing construction of the access road, while discussions with banks and lending agencies on project finance have been ongoing. Extensional and regional exploration is also proceeding.
The mine plan and design is based on ore extraction by underground mining methods only, using mechanized cut and fill, with the processing of the free-milling ore taking place in a conventional CIL plant. However, a study has now been completed which indicates that it is technically feasible to open pit the top portion of the orebody. Work will continue in this area, as extraction of the upper portion of the orebody should increase the mineable ore reserves and improve the safety and economics of the project.
The current proposed scheme is for throughput of 200,000 t/y (mine/plant) producing 100,000 oz/y of gold and 180,000 oz/y of silver for a life of six-and-a-half years.
In September TSG announced that it has agreed in principle to sell all of the company’s interests in its two wholly owned subsidiaries, GRK Amikan and AS Angarskaya Proizvodstvennaya Kompaniya (AS APK), to AngloGold Ashanti for a cash consideration of $40 million.
Amikan holds the license for exploration and mineral extraction at the Veduga project, as well as an exploration license in respect of the 540km2 area surrounding Veduga. It has a book value of $22.9 million and made an operating loss of $1.8 million in 2005. AS APK holds the license for exploration and development of the Bogunay property. It has a book value of $2.4 million and made an operating loss of $116,000 in 2005. Both Veduga and Bogunay are located in Krasnoyarsk Krai, central Siberia.
International Mining‘s November issue, due out shortly, features a major review of projects within the CIS.