GoldBridges Global Resources PLC Sekisovskoye underground update (7670V)
August 12 2015 - 2:00AM
UK Regulatory
TIDMGBGR
RNS Number : 7670V
GoldBridges Global Resources PLC
12 August 2015
12 August 2015
GoldBridges Global Resources Plc
("GoldBridges" or the "Company")
Sekisovskoye underground update
GoldBridges Global Resources plc is pleased to announce that it
will progress development of its Sekisovskoye underground mine by
using a haulage decline rather than sinking a shaft. This will
enhance financing flexibility for the mine by significantly
reducing the capital expenditure required to deliver the
underground expansion.
GoldBridges also announces that it has concluded an agreement
with its key shareholder, African Resources, to support the
financing of the underground mine expansion.
Background
In November 2014, GoldBridges released the results of the
Competent Person's Report on the underground development project
for its Sekisovskoye gold deposit, which was conducted by
independent consultants Venmyn Deloitte. The study estimated JORC
compliant probable reserves of 2.26 million ounces and both
indicated and inferred resources of 5.14 million ounces.
The study originally envisaged sinking a shaft to access the
gold reserves, with the sinking of the shaft and all other capital
expenditure, including contingency, estimated at US$130 million.
The study assumed an increase in annual gold output to in excess of
100,000 ounces by 2018 and estimated operating costs of US$518/oz.
The net present value of this development project at a gold price
of US$1,166/oz and a discount rate of 9.3% was US$239 million.
Decline access
Following the CPR announcement, GoldBridges has reviewed all
development options for the mine and, rather than take the more
traditional shaft-sinking approach, has made the decision to access
the reserve base by driving a decline underground. Decline haulage
using underground trucks is a commonly used and well proven method
around the world to extract ore from similar deposits to that at
Sekisovskoye. The company believes that taking the decline approach
could materially reduce its initial capital investment (in the
order of a 50% reduction according to preliminary estimates).
Underground development at Sekisovskoye is already underway.
Financing
GoldBridges believes that, by opting for a decline rather than
shaft development, it has materially increased its financing
options for the underground mine expansion. The Company is at an
advanced stage of negotiations with respect to obtaining suitable
financing for the development of the underground mine.
Notwithstanding these negotiations, the Company has received a
commitment from its key shareholder, African Resources, to provide
financing to cover the company's capital requirements if
necessary.
Aidar Assaubayev, CEO of GoldBridges, commented:
"This is an extremely attractive project that will deliver a
significant increase in low-cost gold production at Sekisovskoye.
Given the current challenging gold price environment, we believe it
makes economic sense to reduce our initial capex requirements for
Sekisovskoye as much as possible, and accessing our significant
underground reserves via a decline rather than a shaft solution
achieves this. The reduced capex profile provides us with enhanced
financial flexibility to fund the decline, and we are focused on
securing suitable funding for the project. Furthermore, the
commitment of our key strategic shareholder to provide funding if
necessary will not only allow the development to proceed, but also
highlights our major shareholder's confidence in Sekisovskoye as
our primary asset."
For further information please contact:
GoldBridges Global Resources Plc
Louise Wrathall
+44 (0) 207 932 2456
Strand Hanson (Financial Adviser and Joint Broker)
Andrew Emmott / James Spinney / Ritchie Balmer
+44 (0) 207 409 3494
Cantor Fitzgerald Europe (Joint Broker)
Stewart Dickson / Jeremy Stephenson
+44 (0) 207 894 7000
Bell Pottinger (Financial PR)
Daniel Thöle / Marianna Bowes / Richard Crowley
+44 (0) 203 772 2500
Information on the Company
GoldBridges is a gold mining, exploration and development group
based in Kazakhstan. Whilst the Company was initially established
to exclusively develop and operate the Sekisovskoye gold and silver
mine in the East Kazakhstan Region, it is now actively targeting
additional gold mining opportunities in Kazakhstan. This includes
the adjacent prospective Karasuyskoye Ore Fields, on which
GoldBridges was recently awarded the tender to perform further
confirmatory testing in order to gain the sub-soil user
licence.
The Company holds a 100 per cent shareholding in DTOO
Gornorudnoe Predpriatie Sekisovskoye ("DGPS") which holds a subsoil
use contract in relation to the Sekisovskoye deposit, covering a
total area of 0.855km(2). The subsoil use contract for Sekisovskoye
is valid until 2020 and the Company currently intends to seek to
extend the contract in accordance with its terms. The Company also
holds a 100 per cent shareholding in DTOO Altai Ken-Bayitu LLP
which owns and operates the processing plant at the Sekisovskoye
deposit. The Sekisovskoye deposit is located at the village of
Sekisovka, approximately 40km north of the town of Ust-Kamenogorsk,
the capital city of the East Kazakhstan Region. The current
operation is focused on mining two open pits where the
near-vertical deposits extend to the surface. The open pits are
nearing their end of life in 2015, and the Company is developing an
underground extension to exploit the deposits to depth.
The Company intends that the Sekisovskoye deposit shall become a
selective-mining underground operation. As at 31 May 2014, the
Company's proven and probable reserves consisted of 2.3Moz of gold
and 3.0Moz of silver, and the Company's measured, indicated and
inferred resources consisted of 5.1Moz of gold and 3.5Moz of
silver, in each case as classified in accordance with JORC.
In the year ended 31 December 2014, the Company's consolidated
revenue was US$35.2 million and its EBITDA was US$5.3 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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