TIDMGBGR
GoldBridges Global Resources Plc
("GoldBridges" or the "Company")
Sekisovskoye Underground Mine Development and Capital
Expenditure Update
Highlights:
-- Significant progress in decline construction;
-- Total expansion capital expenditure estimated at US$42 million;
-- Estimated external funding requirement for total expansion of
between US$20 million and US$30 million depending on gold
price;
-- Mining consultancy group, Mining Plus, has undertaken technical
studies, with positive results, including:Potential to
selectively mine the deposit at a higher gold
grade than the Venmyn Deloitte JORC compliant probable
reserve
suggested, giving the company operational flexibility;Optimal
mining methods proposed;US$100 million NPV enhancement
potential.
Decline construction update
As previously announced, GoldBridges has already commenced
development of the haulage decline, enabling access to its
significant deeper gold reserves. Development of the decline is to
be conducted in two stages. Initially, this will involve
development of the route up from the 250m above sea level (masl)
towards the open pit. The second stage of development will be from
the open pit towards the intersection with the first route.
In H2 2015, approximately 50% of the initial stage work was
completed and a total of 570m of decline development work has been
undertaken to date. Construction of the portal, which forms part of
the second stage development, has already commenced, and developing
this part of the decline from the open pit will commence in March
2016 when the open pit mine will be depleted. As part of the
preparation of the underground mine for more extensive mining in
2016, the Company has concluded ore handling/ancillary equipment
contracts totaling US$8 million, with three 25 tonne underground
trucks, a load-haul-dumper, and a drilling rig already commissioned
for underground works.
By completing the second stage of decline development in May
2016, the Company expects to reduce the current haulage distance
from 3km to 1.2km and to increase the ore throughput capacity to
45,000 tonnes per month. This should enable the company to mine at
an annualised run rate of 500,000 tonnes per year from May 2016
onwards.
Mining Plus studies
In H2 2015, Mining Plus, the international mine consultancy
group, was retained by GoldBridges to undertake studies on the
underground mining plans and to assist it in transitioning its
Sekisovskoye mine into a large underground gold operation with
100,000 ounce annual output.
Mining Plus has expertise in geological modelling and
geotechnical aspects for hard rock underground mines, combined with
underground mine planning experience, particularly using decline
haulage. It has offices in Australia, Canada and Peru and provides
mining expertise from the conceptual stage of projects, through to
feasibility study work, project delivery, commissioning, and mine
closure.
Under the scope of this assignment, Mining Plus re-modelled the
Sekisovskoye drilling data and practically and financially reviewed
all mining methods that could potentially be applicable to the
underground mine development at Sekisovskoye. The studies had
several important findings:
-- Mining Plus identified that, while several mining methods are
applicable at Sekisovskoye, the most efficient methods in terms
of
mining recovery, dilution and costs are long hole open stoping
methods
with either paste fill or with cemented aggregate fill. Both
mining
methods provide high selectivity and sequencing flexibility,
giving
GoldBridges the opportunity to extract higher grade ore earlier
in the
schedule.
-- The Mining Plus work identified the opportunity to increase the
overall head grade of the ore mined by selectively mining the
deposit,
giving the company increased flexibility.
-- Mining Plus is of the opinion that the Net Present Value (NPV) of the
project could be enhanced by approximately 50% (or US$100
million) as
that company's financial model demonstrated a potential NPV of
US$325
million at a discount rate of 9.3% and a gold price of
US$1,100/oz. By
comparison, the previous Venmyn Deloitte financial model, using
the
same assumptions, demonstrated a NPV of US$226 million.
These findings mean that GoldBridges could further reduce its
cash cost of operation at full production, as it has the option of
mining fewer tonnes at a higher grade.
Overall, the Mining Plus studies provide GoldBridges with
excellent technical solutions to successfully transition
Sekisovskoye to an underground mine in the next 12 months.
Capital expenditure programme
Taking into account the results of the Mining Plus study and the
Company's updated mining plans, GoldBridges estimates total
expansionary capital expenditure, excluding contingency, of US$41.6
million as demonstrated in the following table:
Total 2016 2017 2018
Capex US$m
Development capex
Prospecting drilling 1.1 1.0 - 0.1
Underground Development 2.5 0.8 1.2 0.6
Infrastructure 1.4 1.4 - -
Ore Handling Equipment 23.1 11.6 8.5 3.0
Process Plant Incremental Expansion 13.4 - - 13.4
Contingency 3.8 1.3 0.9 1.6
Total 45.4 16.1 10.5 18.8
In order to complete the underground mine development, to
increase the processing plant capacity to a run rate of 1 million
tonnes per year and to produce 100,000 ounces of gold annually, the
Company estimates that it will require between US$20 million and
US$30 million in external funding, with the remainder to be
generated from operational cash flows. This estimate is based on a
gold price scenario for the next three years of between US$900 and
US$1,100 per ounce.
Funding update
As previously announced, GoldBridges has received a commitment
from its key shareholder, African Resources, to provide financing
to cover the company's capital requirements if necessary. The
Company is now in advanced discussions with regard to financing
solutions and will update the market in the near term once a
solution has been finalised.
Aidar Assaubayev, CEO of GoldBridges, commented:
"In these challenging markets, we are pleased to be able to
commit to developing our underground gold mine and to increasing
our annual gold production to 100,000 ounces by 2018. We are now at
an advanced stage of discussion regarding potential funding
opportunities and we will update the market once a decision has
been made."
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
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 0.855km². 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.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20160202005758/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
February 02, 2016 06:09 ET (11:09 GMT)
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