KazakhGold Group Limited today announces the decision taken at a Board of Directors Meeting held on May 18, 2010
May 19. KazakhGold
The Board of Directors has reviewed the development strategy of the Kazakhstan assets of the Company until 2020.
The strategy provides for the modernization of existing production facilities to increase processing capacities from 0.97 mtpa to 1.3 mtpa and for the construction of the Central metallurgical plant (CMP) to decrease a discount given to existing semi-products of KazakhGold (to produce Dore gold).
The strategy also includes:
Exploration program for 2010 -2011 with the objective of increasing the mineable reserves base up to 262 tonnes under the base-case scenario and up to 359 tonnes under the optimistic scenario.
Upon successful completion of the exploration works in 2011, construction of the following is planned for 2013 – 2016 under the base-case scenario:
(i) New mills at Aksu, Bestobe and Zholymbet with a total capacity of 4.7 mtpa;
(ii) Heap leaching facilities with processing capacity of 2.2 mtpa.
Capital expenditures under the base-case scenario are estimated at US$512 mln.
Upon the successful completion of the exploration works in 2011, under the optimistic scenario, construction of the following is planned for 2013-2016:
(iii) New mills at Aksu, Bestobe and Zholymbet with a total capacity of 9.0 mtpa;
(iv) Heap leaching facilities with processing capacity of 4.3 mtpa.
Estimated capital expenditures under the optimistic scenario are US$661 mln.
Production volume in 2016 would amount to 500 thousand ounces under the base-case scenario of the Company’s development and 640 thousand ounces under the optimistic scenario.
The Board of Directors has approved the development strategy of KazakhGold Group Limited until 2020. The Board has also approved the capital expenditure budget for 2010 – 2013 for the total sum of US$ 202 mln for modernization of the existing processing facilities, construction of the CMP and enhancement of underground and open-pit ore mining, including:
– US$ 83 mln to finance modernization of existing facilities and construction of the CMP;
– US$ 119 mln to ensure the increase in the volumes of underground and open-pit ore mining.
The figures for each specific year are subject to the relevant financing and may be revised as part of the corresponding budgets.
«The modernization of existing assets and commissioning of new operating facilities stipulated by the Strategy will strengthen the Company’s position among the leaders of the Kazakhstan gold mining industry, and the growth of the mineral reserves base will provide the necessary conditions for the successful development of the Company», says Evgueni Ivanov, Chairman of the Board of Directors of KazakhGold Group Limited. «Today we have already started investing in modernization and expansion of production capacities, in particular, a heap leaching facility has been launched at the Akzhal deposit located in the Eastern Kazakhstan and the first Dore gold has been smelted» – Evgeny Ivanov noted.