MINEX Forum

Tag: gold mining

  • Kazakhstan’s Gold Mining Industry Faces Challenges and Opportunities

    Kazakhstan’s Gold Mining Industry Faces Challenges and Opportunities

    At the recent V Forum of Gold Industry in Astana, Aida Alzhanova, Deputy General Director for Strategic Development of Polymetal Eurasia, discussed the current state of the industry and the company’s business growth plans.

    Aida addressed concerns about the depletion of the mineral resource base in the gold mining industry, despite experts’ optimism about Kazakhstan’s subsurface resources. The industry faces significant challenges, including the depletion of the mineral resource base, which is seen as a fundamental issue. Gold mining companies are increasing production rates annually, but the real growth in reserves is slow, with exploration and preparation of deposits taking seven to eight years on average. No major gold deposits have been discovered since independence, and many operations rely on Soviet-era discoveries. Some enterprises consider short-term extraction of off-balance ores, and some plants continuously seek external raw materials.

    Two primary reasons for these challenges are the low investment attractiveness of geological exploration, especially greenfield, and the bureaucratic process of obtaining permits for sample export for research. Investment incentives, such as real VAT exemptions for both subsoil users and service companies, are seen as effective tools. A significant issue for the entire mining sector is the non-return of payable VAT, which deters investors.

    Another major challenge is the low intensity of geological exploration. A bureaucratic process hampers the export of samples for analysis, with delays due to local accreditation requirements. The only internationally accredited laboratory, ALS Kazgeokhimia, is overloaded, with standard analyses taking 45 to 60 days, which is too long given the short field season in many regions. Accelerating exploration would benefit from the launch of a digital geological information database, which would facilitate AI implementation, expedite site selection, and increase the chances of discovering good deposits.

    To replenish the mineral resource base, Polymetal Eurasia actively collaborates with junior companies. The 2017 Subsoil Code simplified exploration rights acquisition, boosting domestic junior business and improving geological study quality. The company has about 20 exploration licenses and several for geological study, covering over 70,000 square kilometers. They are also developing digital solutions for managing large volumes of geoinformation and constructing an analytical laboratory with a capacity of 200,000 samples per year.

    Following the sale of Russian assets and the company’s rebranding to Solidcore Resources plc, Polymetal’s focus has shifted to prioritizing Kazakhstan. The strategy involves developing processing hubs in eastern and northern Kazakhstan and pursuing greenfield projects to establish new hubs. Long-term growth involves acquiring new deposits with assessed or ready-for-final-evaluation reserves, with domestic junior companies being key partners in this endeavor.

    Polymetal plans to invest approximately $1 billion, primarily in building a metallurgical plant in Pavlodar (Irtyshsky GOK) and expanding the company’s asset portfolio, including exploration and M&A activities.

  • Bozhurishte Residents Overwhelmingly Reject Gold Mining in Zlatusha Area

    Bozhurishte Residents Overwhelmingly Reject Gold Mining in Zlatusha Area

    In a decisive referendum held on Sunday, 96.82% of eligible voters in the municipality of Bozhurishte rejected exploration activities and gold mining in the Zlatusha area, according to the Bozhurishte Municipal Election Commission (BMEC). The Zlatusha area spans the territories of Sofia Municipality, Sofia Province, and the municipalities of Dragoman, Slivnitsa, Bozhurishte, Breznik, and Pernik.

    Out of 6,815 eligible voters, 4,024 cast their ballots, with 3,896 affirmatively responding to the question opposing the Bozhurishte Municipal Council and the Mayor’s coordination of plans and decisions related to the extraction of metallic minerals and underground resources in the municipality’s territory, as defined by Decision No. 486/2018 of the Energy Minister.

    For the proposal to be accepted, at least 40% of eligible voters needed to participate, and more than half of the participants had to vote ‘Yes’. With these criteria met, the BMEC declared the proposal accepted. This decision can be appealed before the Sofia Region Administrative Court within seven days.

    Sunday’s voting took place in 12 sections across Bozhurishte municipality, coinciding with the elections for the National Assembly and European Parliament. The referendum was initiated by all Bozhurishte municipal councillors, prompted by a contract for a project to prospect and explore minerals in the Zlatusha area.

  • Eastern Gold to Develop Rodnikovoye Gold Deposit

    Eastern Gold to Develop Rodnikovoye Gold Deposit

    Eastern Gold plans to bring the Rodnikovoye gold deposit, part of the Ashaly-Daubai ore field, into industrial production. The company’s mining plan has been published on Kazakhstan’s Unified Environmental Portal. The project documentation indicates that operations will take place at two sites: Belaya Gorka and Rodnikovoye, with extraction of precious metals conducted through open-pit mining.

    The balance reserves of the first site include 818,000 tons of oxidized gold-bearing ores and 1.18 tons of gold, with an average gold content of 1.44 g/t. The second site has 1.15 million tons of ore and 1.15 tons of gold, averaging 1.31 g/t. Eastern Gold plans to extract 250,000 tons of ore annually, with the mining operations scheduled from 2024 to 2032.

    The chosen method for ore processing is heap leaching. Industrial trials of processing the oxidized ores from Rodnikovoye have shown that with gold content in the raw ore between 0.8-1.3 g/t, the extraction rate of precious metals into the solution is 65%. The final product of the production process will be Dore alloy.

  • Chaarat Gold Secures Major Funding for Tulkubash Mine in Kyrgyzstan

    Chaarat Gold Secures Major Funding for Tulkubash Mine in Kyrgyzstan

    Chaarat Gold Holdings Ltd announced on Friday significant progress in securing funding to initiate production at the Tulkubash gold mine in Kyrgyzstan. The company’s shares surged 43% to 4.00 pence each in London following the announcement.

    Chaarat Gold, a mining exploration and development company, has entered into a non-binding term sheet with Xiwang International Co Ltd (XWIC) for a USD 150 million funding package. This investment would grant XWIC a 60% economic interest in the Tulkubash project, while Chaarat would retain a 40% stake.

    XWIC, an investment company based in the British Virgin Islands and an affiliate of Touchstone Capital Partners, aims to build a substantial portfolio of mining assets globally. This agreement represents a key step in advancing discussions between the parties and sets a clear action plan for a successful transaction.

    The completion of this deal would provide full financing for the development and commencement of production at the Tulkubash gold project. It would also enable Chaarat to restructure its existing commitments and lay the groundwork for potential future joint ventures in the gold mining sector.

    Chaarat continues to engage with other potential funding sources and plans to enter discussions with convertible bondholders regarding outstanding bonds due for repayment at the end of July. The Tulkubash project has an initial mine life of six years, with significant development potential from additional prospects such as Karator and Ishakuldy. The company aims to extend the total mine life beyond 15 years.

  • Kazakhstan Ranks Sixth in Gold Production, Surpassing Previous Year’s Output

    Kazakhstan Ranks Sixth in Gold Production, Surpassing Previous Year’s Output

    Kazakhstan’s gold mining industry witnessed a notable surge last year, with the country extracting 130 tons of gold, propelling it to sixth place in the global ranking of gold-producing nations. This information comes from a report by “Kazinform,” citing data from the United States Geological Survey.

    The recorded gold output of 2023 surpassed the previous year’s production by 15 tons, which stood at around 115 tons. China claimed the top spot in 2023 with 370 tons of gold production, followed by Russia and Australia sharing second and third place, respectively, with 310 tons each.

    Overall, gold miners worldwide extracted 3,000 tons of the precious metal last year, with estimated reserves totaling 59,000 tons. When considering gold reserves, both explored and unexplored, Australia and Russia lead the pack, with reserves of 12,000 and 11,100 tons, respectively.

    The United States Geological Survey assesses Kazakhstan’s gold resources at 1,000 tons. It’s worth noting that earlier, Erlan Akbarov, the Chairman of the Committee of Geology under the Ministry of Ecology, Geology, and Natural Resources of Kazakhstan, stated that the country’s reserves amount to 20,000 tons.

  • Centerra Gold Acquires Thompson Creek Metals Company

    Centerra Gold Acquires Thompson Creek Metals Company

    Toronto-based gold mining company Centerra Gold Inc. has completed the acquisition of Thompson Creek Metals Company Inc., which operates the Mount Milligan Mine near Fort St. James and the Endako Mine near Fraser Lake. According to a news release on July 5, Centerra will acquire all issued and outstanding common shares of Thompson Creek. At Mount Milligan, plans include the addition of secondary crushing by the end of 2016 to increase the process rate to over 62,500 tonnes per day and an expansion of the flotation circuit to enhance gold and copper recoveries. However, the Endako Mine will remain on care and maintenance. Alongside Mount Milligan, Centerra’s portfolio encompasses assets such as the Kumtor Mine in the Kyrgyz Republic and the Boroo Mine in Mongolia. The company also holds the Oksut Gold project in Turkey and is a joint venture partner in the Trans-Canada Project in Ontario.

  • Navoi Gold: The Unsung Giant in the World of Gold Mining

    Navoi Gold: The Unsung Giant in the World of Gold Mining

    Toronto, 4 March 2024 — In an exclusive interview at the Prospectors & Developers Association of Canada (PDAC), MINEX Forum sat down with Evgeny Antonov, Chief Transformation Officer of Navoi Gold (Navoi Mining and Metallurgical Company) to learn about the company’s remarkable journey and its pivotal role in shaping Uzbekistan’s economy.

    Toronto, Canada – Navoi Gold, one of the largest gold producers globally, was showcasing its growth potential at the Prospectors & Developers Association of Canada (PDAC) convention in Canada on 3-6 March 2024. In an interview, the company’s Chief Transformation Officer shared insights into their plans for expansion and how they are working towards becoming a more attractive and understandable company for international investors.

    With an annual production of almost 3 million ounces of gold and a low cost per ounce, Navoi Gold is already a significant player in the gold mining industry. However, the company has no plans to slow down and is aiming to increase its production and resource base further. The company has a robust exploration program in place, with a budget of over $100 million for the year, to identify new targets and deepen their understanding of its flagship mine.

    The company is also committed to ESG principles and is taking steps to reduce its water consumption by 20% by 2030. Additionally, Navoi Gold is transitioning to renewable energy sources and plans to introduce over 500 megawatts of solar power by 2030.

    In terms of growth potential, Navoi Gold is looking to expand its production and resource base both organically and through partnerships with other companies. The company is considering teaming up with other companies and exploring new resources outside of their current area of operation, to become a truly international company.

    When asked about the company’s plans for listing on a stock exchange, Antonov explained that it is up to the company’s shareholder, which is currently 100% owned by the state, to decide if and when Navoi Gold will become a listed company. However, the company is taking steps to make sure they are fully ready for such a decision, including implementing IFRS reporting standards and recalculating its resource base according to international standards.

    Navoi Gold’s growth plans are aligned with the state’s plans to grow the economy by 2030, and the company feels a strong sense of responsibility to contribute to the growth of Uzbekistan’s economy. As the largest taxpayer and employer in the country, the company is committed to continuing to play a significant role in the economy and contributing to its growth.

    Overall, Navoi Gold is a company with a strong track record, ambitious growth plans, and a commitment to ESG principles. With their focus on innovation, technology, and partnerships, they are well-positioned to achieve their goals and become a leading player in the international gold mining industry.

    Watch the interview on the MINEX Forum YouTube Channel

  • Romanian minister comes up with gold mining grant scheme amid Rosia Montana scandal

    Romanian minister comes up with gold mining grant scheme amid Rosia Montana scandal

    Marcel Bolos, the finance minister of Romania, has proposed a grant scheme for the non-ferrous mining sector to provide essential raw materials like copper to the struggling industry, as reported by Bursa.ro. This initiative, if implemented, aims to support the sector which has faced challenges in recent times.

    Of note is Bolos’s emphasis on including gold mining among the recipients of this scheme, which is particularly notable given the ongoing legal dispute surrounding the Rosia Montana gold mining project. The outcome of this litigation with Gabriel Resources, the company behind the Rosia Montana project, is still pending official confirmation, although unofficial negotiations for a resolution are reportedly ongoing.

    Bolos’s comments on the Rosia Montana project have drawn attention, especially considering the project’s controversial history and the involvement of various political parties. The minister has referenced substantial compensations demanded by Gabriel Resources, purported investments made by the company, and the possibility of a “non-financial settlement” to resolve the dispute. Bolos suggests that such a settlement, which could involve allowing the project to continue, might be more favorable to Romania than paying significant financial compensation.

    However, Romania Curata, an NGO opposing the gold mining project, provides additional context to Bolos’s statements. The NGO claims that Gabriel Resources holds a valid license for the Rosia Montana project and asserts that the company aims to remove the region from UNESCO’s protected sites list for Environmental, Social, and Governance (ESG) reasons. Romania Curata alleges that there may be hidden elements of corruption involved in potential agreements between the government and Gabriel Resources, with the government potentially seeking to frame any resolution as a ruling from the World Bank’s ICSID court to justify its actions.

    According to Romania Curata, the risk of Romania paying billions of dollars in compensation could make it more acceptable for the government to sell any resolution as a decision mandated by an international court rather than a negotiated agreement. The NGO contends that such a scenario could ultimately lead to Rosia Montana being excluded from UNESCO’s protected sites list.

    Overall, the situation surrounding the Rosia Montana project remains complex and politically charged, with multiple stakeholders and interests involved. The proposed grant scheme for the non-ferrous mining sector adds another layer to the ongoing debate about Romania’s mining industry and its future direction.

  • Underground gold mining at Kumtor can provide hundreds of millions of additional dollars to the Kyrgyzstan’s budget

    Underground gold mining at Kumtor can provide hundreds of millions of additional dollars to the Kyrgyzstan’s budget

    The Kumtor deposit is one of the ten largest gold deposits in the world. The mine is located in the Issyk-Kol region in the permafrost zone at an altitude of 4,000 meters above sea level. Revenues from Kumtor account for roughly one-third of the state budget in Kyrgyzstan, with the mine producing about 17 tons of gold per year.

    “The feasibility study of the underground gold mining project developed by specialists speaks about its economic efficiency. According to preliminary data, with the help of an underground mining method, it will be possible to get 115 tons of gold. Taking into account the precious metal mined at the [site] by the open-pit method, this is a big step forward,” said Almazbek Baryktabasov, President of the Kumtor Gold Company. Mining underground will help the company reach gold of a higher-grade ore, he said, and as a result, the company will be able to increase its tax payments.

    Until its nationalization in 2021, the Kumtor mine was owned by Canadian company, Centerra Gold. Earlier, the Canadian owners tried to extract gold through shafts. However, gold prices did not render this profitable, as the shaft method is much more expensive than the open-pit mining. Over the past ten years, however, the price of an ounce of gold has risen by more than $700 and is currently trading at just over $2,000. Before Kumtor was expropriated, Centerra Gold spent approximately  $180 million dollars on research related to underground mining.

    Today, the authorities have allocated an additional mining site next to the one where gold ore is already being extracted. According to some reports, the new site contains a denser concentration of the precious metal per unit of ore. Currently, at Kumtor’s open-pit mine, it takes one ton of processed ore and more than 40 tons of extracted waste rock to produce 5-7 grams of gold. Underground mining could double that yield. Furthermore, underground mining is not as environmentally damaging as open-pit mining. For example, one of Kumtor’s main environmental concerns is the destruction of glaciers which literally hang over the edge of the open pit.

  • Polymetal clarified the timing of the launch of underground mining at the Bakyrchik gold deposit

    Polymetal clarified the timing of the launch of underground mining at the Bakyrchik gold deposit

    It will begin in 2035, and preparations for it five years earlier.

    Polymetal will switch to underground mining at the Bakyrchik gold deposit in the Abay region in 2035. The head of the company, Vitaly Nesis, announced this during an online conference on production results for 2023 and its fourth quarter. Open pit mining at Bakyrchik has been carried out by Polymetal under the auspices of the Kyzyl project since 2018.

    “We planned to actually start underground ore mining at Bakyrchik in 2035. But the project itself will begin in 2030 in terms of building the surface infrastructure for the underground mine and the development workings that will be required to access the ore. I think it will last more than four years. Thus, despite the fact that from the point of view of total capital expenditures, the expenses will be very significant – presumably the current estimate is $200-250 million, they will not be critical from the point of view of the amount of total capital investments,” explained the head of Polymetal, commenting on the issue in business. kz.

    Let us remind you that earlier the media reported that Polymetal intends to begin the underground mining stage at Bakyrchik in 2030, in addition, other dates were announced – 2031.

    During his speech at the online conference, Vitaly Nesis also said that in addition to searching for objects for subsoil use in Kazakhstan, where the company may be interested in deposits of base metals – copper, zinc, lead, tin, Polymetal is now engaged in a country analysis of possible projects in Tajikistan. A similar assessment has already been carried out for Uzbekistan and Kyrgyzstan, however, nothing suitable has been found there yet.

    As is known, Chinese companies dominate the mining sector in Tajikistan. More than ten years ago, Kazzinc tried to enter there through a tender for the Bolshoi Konimansur silver deposit. This spring, Polymetal management plans to travel to the mountainous republic again to visit subsoil use facilities; perhaps, already in the third quarter it will become known about any projects in this country.

    As for Russian assets, the gold mining company plans to part with them by the end of the first quarter, as was promised to the Kazakh authorities; now there is a potential buyer for this within the Russian Federation. In Russia, the company continues to have difficulties with the sale of finished product reserves; a significant tightening of control over the export of precious metals has led to the accumulation of concentrates from Kyzyl, Albazino, Nezhdaninsky, Vorontsovsky and Maysky in seaports, Polymetal indicated in a release for the past quarter.

    “Our Russian subsidiary continues to make efforts to convert inventory into sales in Russia, which also affects sales from Kazakhstan, since a significant portion of the concentrate from Kyzyl is sold as a mixture with pure Russian concentrate. As a result, we are seeing an accumulation of concentrates from Kyzyl, Albazino, Nezhdaninsky, Vorontsovsky and Maysky in all directions in seaports. We continue to hope that this issue will be resolved in the first half of this year, obviously with a particular focus on Kyzyl. We inadvertently expect that the concentrate from Kyzyl this year will be much purer and will not require as much mixing as in 2023,” said Vitaly Nesis during a conference call.

    Let us remind you that high-carbon concentrate from Kyzyl is exported to China. In October, inbusiness.kz wrote that Polymetal faced logistical challenges when delivering gold-containing raw materials from Kyzyl to the Far Eastern harbors.

    It should be noted that in 2023, production at Kyzyl decreased to 316 thousand ounces of gold, 4% less than the 2022 production figure of 330 thousand ounces. The company explains this by a decrease in the content of precious metal in the ore of the deposit. When switching to underground mining, it can increase by 20-25%, Nesis believes.

    The decline in production at the Varvarinsky hub in the Kostanay region was even greater – by 20% from 211 thousand ounces in 2022 to 169 thousand ounces in 2023, which “is due to the lower content of Komarovsky ore in the cyanidation area and a decrease in the share of high-quality third-party ore in raw materials at the flotation section,” as specified in the Polymetal release. In total, the company produced 486 thousand ounces (approximately 15.1 tons) in Kazakhstan last year, which can hardly be called achieving the previously planned figure of half a million ounces. By the way, in the context of the unclear prospect of the withdrawal of capital expected from the upcoming sale of Russian mines and the planned capital expenditures for the Irtysh MMC, Polymetal was not able to completely free itself from the debt load of its Kazakh assets – at the end of 2023 they reached $171 million.

    Meanwhile, the cost of gold production in Kazakhstan began to be strongly influenced by tariffs for electricity and freight transportation by rail, growing from year to year.

    “The Company expects cash costs (TCC) of US$ 900 – 1,000 and all-in cash costs (AISC) of US$ 1,250 – 1,350 per gold equivalent ounce. The increase compared to the previous year is mainly due to a sharp increase in tariffs for electricity and rail transportation in Kazakhstan,” the final release states.

    Commenting on the publication’s questions about how the growing tariffs of KTZ and the electric power industry will affect the cost of production in Kazakhstan in the next five years, Vitaly Nesis noted that the company is not particularly trying to analyze tariffs on the railway due to uncertainty, but in energy supply it plans ensure your own generation.

    “From an electricity perspective, we believe tariffs will rise in real terms by at least 20% per annum over the next five years. Therefore, we continue to invest in our renewable energy facility: solar energy plus gas (gas piston station – approx.) at Varvarinsky, and then we have plans to do the same at Kyzyl. The only way to avoid significant increases in electricity prices in Kazakhstan is to switch from expensive coal power to renewable energy sources, which are much cheaper and more environmentally friendly, and this is our strategy in this regard,” Nesis noted.

    PS This material was adapted on February 2, 2024 at 18.30 after receiving updated information that the subsoil use contract for the Bakyrchik gold deposit was extended until December 31, 2030.