Goldbelt Resources lands two other Kazakh projects

An agreement with a Kazakh company gives Goldbelt Resources (VSE) the right to acquire a 60% interest in each of the Abyz and Progress deposits, situated 250 km east-southeast of Karaganda in central Kazakhstan.

The stated resource at the Abyz deposit is 8.2 million tonnes grading 1.6% copper, 3.51% zinc, 0.38% lead, 4.7 grams gold and 42.3 grams silver per tonne.

The resource is contained in two steeply dipping zones in Devonian terrigenous sediments and tuffaceous andesites on the east side of a north-south trending fault.

The East zone, which may be open pittable, occurs about 20 to 40 metres below surface, with a small, secondary enriched zone outcropping to the east.

The West zone, open at both ends, is located 350 to 550 metres below surface and will have to be mined using underground methods.

Goldbelt reports that a considerable amount of work has been completed on the deposit, including 75,000 metres of diamond drilling plus 1,758 metres of underground development.

Underground development includes a horizontal drift on the 100-metre level with cross-cuts driven every 20 metres.

Less information is available on the Progress deposit, which has a stated resource of 2.2 million tonnes grading 5.7 grams gold in a “pipe-like” structure.

Under the terms of the property agreement, Goldbelt will pay the government of Kazakhstan US$1.5 million. Of the total, US$750,000 is payable on registration of a final agreement, with the balance payable upon receipt of final export and environmental approval.

Goldbelt will pay the complete cost of bringing the Abyz deposit into production and will receive 90% of the after-tax cash flow until its funds (plus interest) have been recovered. Proceeds will then be split on a 60-40 basis. The property agreement also requires Goldbelt to make a production decision within 24 months.

Goldbelt is now in the process of arranging financing for the acquisition.

Meanwhile, back in Canada, the Supreme Court of British Columbia has ordered Goldbelt to issue 3,170,590 shares to Black Swan Gold Mines (TSE).

The court finding relates to a January, 1992, settlement agreement between the two companies over rights to a 50% interest in the Leninogorsk gold tailings project in Kazakhstan.

The 1992 settlement resulted in Goldbelt’s retaining the interest in the tailings project, and Black Swan’s receipt of 1.2 million shares of Goldbelt plus a cash payment of $308,000.

Black Swan’s recent court action alleges that Goldbelt was required to issue additional shares after the completion of $5.5 million in financing in order to bring the Black Swan shareholding up to 5.5% on a fully diluted basis.

Goldbelt met the financing objective in the first half of 1994, but did not agree with Black Swan’s interpretation of the deal, prompting the subsequent lawsuit by Black Swan.

Goldbelt plans to appeal the decision to the B.C. Court of Appeal.

The Leninogorsk gold tailings project is now held under a 50-50 joint venture between Goldbelt and Pegasus Gold (TSE) which, in turn, are earning a 50% interest in the project from the Kazakh government.