TIDMGBGR
RNS Number : 1443X
GoldBridges Global Resources PLC
17 November 2014
17(th) of November 2014
GoldBridges Global Resources Plc
("GoldBridges" or the "Company")
GoldBridges announces a significant upgrade to its Mineral
Resources and Ore Reserves and releases results of the Independent
Competent Person's Report.
Venmyn Deloitte, GoldBridges independent consultant, has written
a Competent Person's Report ("CPR") for the 100% owned Sekisovskoye
Underground Gold Development Project in Kazakhstan and has
estimated an updated Mineral Resource that is significantly higher
than the previous December 2011 estimate.
Highlights
-- The CPR estimated JORC compliant gold reserves and resources of:
o Probable Ore Reserves of 2.26 million ounces ("Moz") - 17.25
million tonnes ("Mt") at 4.09 grammes / tonne ("g/t") Au from
surface (approximately +325m above sea level) to -400m;
o Mineral Resources totalling 5.14Moz - 33.90Mt at 4.72g/t of
which 2.67Moz are classified as Indicated Resources and 2.47Moz are
classified as Inferred Resources from surface to -800m;
o Additional Exploration Results of 3.30Moz, 24.40Mt at 4.21g/t
to -1500m that with further exploration drilling may be upgraded to
Mineral Resources.
-- The updated reserve estimate shows an increase to 2.26Moz
from the December 2011 estimate of 0.27Moz. Resources have
increased since December 2011 from 1.80Moz to 5.14Moz.
-- Key metrics - gold production of 100,000-120,000 oz per year
post 2018, initial capital investment of US$117.5M and operating
costs of US$518/oz or US$58.19/t of ore mined.
-- NPV of US$238.6M using gold and silver price of US$1,166/oz and US$15.99/oz as of
3 November 2014
-- Robust economics under lower gold price scenarios - NPV of
US$203M at a gold price of US$1,050/oz and US$55M at a gold price
of US$750/oz.
GoldBridges CEO Aidar Assaubayev commented: "We are pleased that
the strategic review we completed in late 2013 on our Sekisovskoye
underground development project has been independently supported by
consultants Venmyn Deloitte. This underscores the Board's belief
that it is a robust project. We are delighted to include the
findings of some of the recent deeper drill holes in our report and
the result is that we now have a JORC compliant Mineral Resource at
Sekisovskoye in excess of 5Moz, representing an increase of 285 per
cent. on the previously stated resource. The Board's aim is now to
develop the Sekisovskoye Underground Development Project with a
central focus on producing at a highly competitive cash cost."
Venmyn Deloitte Competent Person's Report
Venmyn Deloitte has undertaken an independent technical review
of the Sekisovskoye Underground Gold Development Project in order
to identify the relevant factors that are likely to influence the
future growth and profitability of the project.
Mineral Resources and Ore Reserves
Venmyn Deloitte conducted a review of the exploration drilling,
metallurgical testing, geological modelling and the GKZ Reserve and
Resource prepared by GoldBridges, and has used this information to
estimate the JORC (2012) compliant gold and silver Mineral
Resources. These are shown in the table below.
Level JORC Gold Tonnes Gold Contained Silver Contained
(masl) Classification Cut-Off (kt) Grade Gold Grade Silver
Grade (g/t) (Moz) (g/t) (Moz)
(g/t)
Surface to
-400m Indicated 3.00 15,700 5.32 2.67 6.99 3.52
Inferred 2.00 3,500 4.21 0.48 No estimation
---------------- --------- ------- ------- ---------- -------------------
-400m to -800m Inferred 2.00 14,700 4.21 1.99 No estimation
--------------- --------- ------- ------- ---------- -------------------
TOTAL / AVERAGE JORC
RESOURCES 2.46 33,900 4.72 5.14 6.99 3.52
--------- ------- ------- ---------- ------- ----------
Note 1: Rounding of tonnes and ounces may result in computational
discrepancies.
Note 2: Average Ag grades and total Ag ounces relate only to those
tonnes where estimations have been made.
Note 3: Resources are stated inclusive of reserves
JORC Indicated and Inferred Mineral Resources total 5.14Moz. In
addition, a further 3.30Moz have been identified as an Exploration
Result below the -800masl. While these will require further
exploration drilling to be potentially upgraded to Mineral
Resources, this result does highlight the potential for a larger
Mineral Resource than is currently estimated. Assuming that this
potential were realised, Sekisovskoye would contain in excess of
8Moz of gold.
Exploration Results estimated are shown in the table below. The
Exploration Results have not been reported as a range because of
the conversion from GKZ P1 Reserves, which do not require a
range.
Level JORC Gold Tonnes Gold Contained Silver Contained
(masl) Classification Cut-Off (kt) Grade Gold Grade Silver
Grade (g/t) (Moz) (g/t) (Moz)
(g/t)
Exploration
-800m to -1500m Result 2.00 24,400 4.21 3.30 No Estimate No Estimate
---------------- --------- ------- ------- ---------- ------------ ------------
Note 1: Rounding of tonnes and ounces may result in
computational discrepancies.
Note 2: Average Ag grades and total Ag ounces relate only to
those tonnes where estimations have been made.
Subsequent to estimating the Indicated Resource, Venmyn Deloitte
applied the appropriate modifying factors (including dilution and
mining losses) and has estimated a Probable Reserve of 2.26Moz of
gold, as demonstrated in the following table.
JORC Tonnes Gold Grade Silver Grade Contained Contained Silver
Classification (Mt) (g/t) (g/t) Gold (Moz)
(Moz)
======= =========== ============= ========== =================
Probable 17.25 4.09 5.37 2.26 2.97
======= =========== ============= ========== =================
Note 1: Rounding of tonnes and ounces may result in
computational discrepancies.
Note 2: Average Ag grades and total Ag ounces relate only to
those tonnes where estimations have been made.
Calculated using a pay limit of 2.60g/t
The Ore Reserve and Mineral Resource estimates have been based
on a very substantial exploration programme which represents more
than 170,083m of drilling.
Sekisovskoye gold production
The current Sekisovskoye Mine is predominately an open pit
operation with a conventional carbon-in-leach (CIL) gold recovery
plant that has a processing capacity of 0.85Mtpa. By 2016, the open
pit is anticipated to cease to supply ore given its increasing
depth and all production is to be sourced from the Sekisovskoye
underground mine.
A small incremental processing plant expansion is planned to be
completed by 2018, which will increase throughput from 0.85Mtpa to
1Mtpa. The expansion will be through debottlenecking of existing
equipment and the addition of some new equipment to support the
upgrade.
GoldBridges has already begun producing gold and silver from the
underground mine and will continue to ramp-up the project which is
expected to reach c. 52 per cent. of total capacity in 2015, 85 per
cent. of capacity between 2016-17 and reaching full capacity by
2018. The following table demonstrates expected underground run of
mine (ROM) production and the associated gold and silver
grades.
Year Year Year Year Year
Description Unit 2014 2015 2016-17 2018-31 2032
Underground
ROM (tonnes) 150,000 520,000 850,000 1,000,000 495,000
---------- -------- -------- -------- ---------- --------
4.1 to 3.6 to
Gold Grade (g/t) 3.9 3.9 4.4 4.7 3.97
---------- -------- -------- -------- ---------- --------
6.6 to 5.85 to
Silver Grade (g/t) 6.3 6.3 7.1 7.2 7.2
---------- -------- -------- -------- ---------- --------
Life of mine gold production is expected to be 1.89Moz with
total associated silver production of 2.72Moz. On an annualized
basis the gold production is anticipated to be c. 100,000 to
120,000 oz per year after 2018, an increase from 30,670 oz in
2013.
From 2016 onwards, the plant is expected to produce gold doré
with an overall gold recovery of 84% and an associated silver
recovery of 75%. This is commensurate with the metallurgical test
work that has been undertaken.
Capital and Operating Costs
GoldBridges has estimated that a total capital investment of
US$117.5M is required between 2014 and 2017 to develop the
Sekisovskoye underground gold mine, to access the reserves and to
maximize the full potential of the ore body;
Activity Unit 2014 2015 2016 2017 Total
Underground Development (US$M) 24.0 21.7 14.5 1.3 61.5
-------- ----- ----- ----- ----- ------
Infrastructure (US$M) 7.9 3.7 12.2 5.0 28.8
-------- ----- ----- ----- ----- ------
Process Plant Incremental
Expansion (US$M) 0.1 0.4 0.0 15.0 15.5
-------- ----- ----- ----- ----- ------
Discovery Bonus (US$M) 0.7 0.0 0.0 0.0 0.7
-------- ----- ----- ----- ----- ------
Total Capital Expenditure
2014-17 (US$M) 39.7 28.7 27.8 21.3 117.5
-------- ----- ----- ----- ----- ------
This excludes a contingency of $13.0M for the initial mine
development plus other sustaining capital for the life of the mine.
Including these items brings the total capital investment to
$146.3M.
Operating costs have been forecast as;
Cost Cost per
LOM Total per t
Activity Cost oz Of Ore
(US$M) (US$/oz) (US$/t)
---------- --------- ---------
Underground Mining
+ Contingency 565.97 300 33.55
---------- --------- ---------
Sustaining/ Maint./
Environ. 136.39 72 8.09
---------- --------- ---------
Processing 243.71 129 14.42
---------- --------- ---------
Sales Expenses 3.22 2 0.19
---------- --------- ---------
G & A 29.20 15 1.73
---------- --------- ---------
Total Operating Costs 981.45 518 58.19
---------- --------- ---------
Financial Outcomes
The financial outcomes based on the JORC compliant Probable
Reserve, the initial capital investment and forecast operating
costs indicate a robust project for the underground mine
development at Sekisovskoye. The Net Present Value (after tax),
using a discount rate of 9.3% and a US$1273/oz gold price, has been
estimated at US$286.7M and the IRR is expected to be 64.4%.
Additional financial modelling has confirmed the project remains
viable at gold prices which are significantly below current prices,
as demonstrated in the following table.
Gold Price Silver Price NPV
(US$/oz) (US$/oz) (US$M)
750.0 15.0 55.2
============= ========
900.0 17.0 135.2
============= ========
1050.0 18.0 203.2
============= ========
1166.0 16.0 238.6*
============= ========
1200.0 19.0 257.8
============= ========
1273.0 19.7 286.7
============= ========
1300.0 20.0 295.6
============= ========
1400.0 21.0 325.5
============= ========
*Management's Estimate, Gold & Silver Price 3(rd) Nov
'14
Additional Resource Potential
The upside opportunity at the Sekisovskoye Mine is related to
further exploration drilling to upgrade the existing multimillion
ounce gold exploration targets to Mineral Resources and to
potentially upgrade the existing Mineral Resources to Ore Reserves.
This may justify a further expansion of the processing plant or
increase the mine life. The option of a feasibility study for a
2Mtpa mine in the future producing more than 200,000oz per year of
gold is being considered based on the increase in the overall
resource and the large volume of prospective exploration targets
identified.
The potential acquisition of the highly prospective and
adjoining Karasuyskoye Goldfields may further justify a combined
expansion with the current and planned operation at Sekisovskoye
Mine.
Venmyn Deloitte's professional advisors are Competent Persons
and Competent Experts as defined by the JORC and SAMREC Codes and
the VALMIN and SAMVAL Codes, respectively.
Venmyn's CPR contains forward-looking statements. These
forward-looking statements are based on the opinions and estimates
of Venmyn Deloitte and GoldBridges at the date the statements were
made. The statements are subject to a number of known and unknown
risks, uncertainties and other factors that may cause actual
results to differ materially from those forward-looking statements
anticipated by Venmyn Deloitte and GoldBridges. Factors that could
cause such differences include changes in world gold and silver
markets, equity markets, costs and supply of materials, and
regulatory changes. Although Venmyn Deloitte believes the
expectations reflected in the forward-looking statements to be
reasonable, Venmyn Deloitte does not guarantee future results,
levels of activity, performance or achievements.
"The statements in this report relating to the Ore Reserve,
Mineral Resource estimates and Exploration Results are based on
information compiled by Mr Andrew N. Clay and Mr Godknows Njowa. Mr
Clay is accredited as a fellow of the Australasian Institute of
Mining (AusIMM) and a registered member South African Council for
Scientific Professions. Mr Clay is a full-time Managing Director of
Venmyn Deloitte. Mr Njowa is accredited as a member of the AusIMM
and is a registered member of the Engineering Council of South
Africa. Mr Njowa is a fulltime Senior Manager for Venmyn Deloitte.
Mr Clay and Mr Njowa both have sufficient experience which is
relevant to the style of mineralization and type of deposit under
consideration and to the activity which they are undertaking to
qualify as Competent Persons as defined in the 2012 Edition of the
JORC Code. Mr Clay and Mr Njowa consent to the Ore Reserve, Mineral
Resource statement and Exploration Result description in the form
and context in which it appears".
GoldBridges Global Resources plc
Rajinder Basra, CFO +44 (0) 207 932
Louise Wrathall, IR 2455
Strand Hanson (Nomad and Joint Broker)
Andrew Emmott
James Spinney +44 (0) 207 409
Ritchie Balmer 3494
+44 (0) 203 540
1720
Peat & Co. (Joint Broker) +44 (0) 203 540
John Beaumont, COO and Head of Research 1723
Blytheweigh (Financial PR)
Tim Blythe
Halimah Hussain +44 (0) 207 138
Camilla Horsfall 3204
This information is provided by RNS
The company news service from the London Stock Exchange
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