Just a week after being dumped from Randgold Resources‘ (GOLD-Q, RRS-L) Luolo gold mine project in Mali, financially burdened contractor MDM Ferromanm has suffered a similar fate about 30 km to the southeast at Nevsun Resources‘ (NSU-T, NSU-X) Tabakoto mine elsewhere in Mali.
Nevsun says it will complete the work remaining at Tabakoto itself, with MDM assisting with commissioning and performance testing. A new start date for commissioning the mill with ore feed is being considered.
Judy Baker, vice-president of business development and investor relations at Nevsun says the company has been paying suppliers directly for the last year, and has been decreasing the scope of MDM’s work since September 2005.
Nevsun has also boosted its estimate of capital expenditure to US$63 million from the original US$40.
Tabokoto is home to proven and probable oxide reserves of 548,000 tonnes grading 3.98 grams gold per tonne; another 2.8 million tonnes of primary mineralization grade 5.5 grams gold. The estimates are based on a gold price of US$350 per tonne, and are good enough to support annual production of about 105,000 oz. for about five years. The nearby Segala deposit and other satellite zones offer potential to expand and extend the life of the mine.
The company expects to reach full commercial production in the first quarter of 2006, instead of the original guidance of October 2005.
Last week, Randgold Resources dropped MDM, putting the completion date of Loulo’s hard-rock crusher in doubt. The crusher was to have been completed in mid-December. Randgold’s capital projects team is now on the job (T.N.M., Jan. 6/06).
MDM is also building a processing plant and related infrastructure at European Minerals‘ (EPM-T) Varvarinskoye copper-gold mine project in northern Kazakhstan. The work is being done under a US$55.7-million lump-sum turnkey contract.
The first gold pour is expected by the end of 2006, with average annual production pegged at 145,000 oz. of gold and 18.4 million lbs. of copper over the first decade of a 15-year mine life. Cash costs are projected at US$130 per oz., after copper credits.
Varvarinskoye is home to proven and probable reserves totalling 60.3 million tonnes 1.2 grams gold per tonne and 0.81% copper, for 2.3 million contained oz. of gold and around 269 million lbs. of copper.
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