World Wide restructures Kazakstani operations

Through its 95%-owned subsidiary, KazUran, Toronto-based World Wide Minerals (WWS-T) is restructuring its recently acquired Stepnogorsk uranium operations in northern Kazakstan.

World Wide bought the right to manage the Stepnogorsk operations last fall from the state-owned mining company Tselinny Gorno-Kimicheskii. World Wide considers the operation’s core assets to be:

* two existing underground uranium mines;

* a uranium processing plant;

* a 180-MW coal-fired power station with a 1,000-km electrical grid; and * the Semisby uranium deposit, which is exploitable using low-cost in situ leach (ISL) recovery. A tentative revised resource estimate for these uranium properties is 10-10.4 million tonnes grading 0.23% uranium.

World Wide intends to sell, close or restructure the remaining assets included as part of the original package deal. These assets include: * a phosphate deposit and processing plant;

* a mill designed to reprocess arsenical gold tailings;

* a gold refinery; and

* an industrial-grade diamond deposit and processing facility.

At Stepnogorsk, where World Wide has laid off 1,500 of about 3,500 personnel, the firm will be restarting the uranium processing mill in mid-March. An existing stockpile of uranium ore grading about 0.28% uranium (900,000 lb. of contained U3O8 ) will be processed first, to be followed, in the summer, by the processing of ore produced from the two restarted mines.

Production from the Stepnogorsk operations for 1997 is projected to be 1.8 million lb. U3O8 , with an increase in annual production to at least 2.2 million lb. by the year 2000. In addition, 2.3 million lb. U3O8 will be toll-processed this year for Kazatomprom, a state-owned company that manages most of Kazakstan’s uranium resources.

World Wide estimates that the uranium produced from the Stepnogorsk operations should generate about US$25 million in revenue for 1997, with the toll processing adding another US$4 million.

Joint venture

In other developments, KazUran has formed a 50-50 joint venture with Kazatomprom in relation to the latter’s uranium mines and deposits in southern Kazakstan. The average uranium grades of the southern mines and deposits are reported to range between 0.04% and 0.09% uranium.

The partners will renovate and expand the ISL-exploitable uranium mines at Mine Management No. 6 in Kyzl Orda province and the Stepnoye and Centralnoye mines in Shimkent province. The work is designed to increase annual uranium output from these mines to 4.2 million lb. U3O8 by 1999 from the current 2 million lb. KazUran will receive half of any production above the current levels and will process all the ore from the mines at its Stepnogorsk facilities. In a break from tradition, KazUran will have no responsibility for social or infrastructure costs, or for liabilities of the mines.

The joint venture will also explore undeveloped uranium deposits, including the Irkol and Kharassan deposits in Kyzl Orda province and the Akdala and Zhalpak deposits in Shimkent province. KazUran will receive a half share of any future production from these prospects.

With the joint venture, World Wide’s total annual production will increase to at least 3.5 million lb. U3O8 by the year 2000, with an additional 5 million lb. being toll-processed annually. Resources attributable to World Wide will increase to an estimated 400 million lb. of contained U3O8 , most of which can be exploited using ISL technology. Resource estimates are being recalculated using a higher cutoff grade of about 0.1% uranium.

World Wide has entered into a long-term sales and marketing agreement with Nuclear Fuel Resources of Denver, Colo., for the marketing of its uranium production. As part of the agreement with Kazatomprom, World Wide will individually market its own share of production.