Nelson builds gold project in Tajikistan

The Zeravshan mining project in Tajikistan will be ready for commercial gold production by the first quarter of 1996.

Operator Nelson Gold (TSE) has a 49% joint-venture interest in Zeravshan, while the remaining 51% is owned by various Tajik government bodies.

The project was started in the 1970s by the Soviet government, which had already developed an underground mine, built a mill and started stripping an open pit. However, gold production had not yet begun when the flow of financing and expertise from Moscow was cut off in 1991. The newly independent state of Tazikistan then assumed control of the project.

The joint-venture property comprises 3,000 sq. km in Tajikistan’s Zeravshan Valley, including three gold deposits: Jilau, Taror and Chore. The total proven and probable reserves at Jilau are 28.3 million tonnes grading 1.43 grams gold per tonne (1.3 million oz. of gold). At Taror, the proven and probable figure is 12.5 million tonnes at 6.78 grams gold per tonne (2.7 million oz.). Both reserve totals have been independently audited. Possible reserves at Jilau, based on Russian and Tajik data, amount to 42.1 million tonnes grading 1.03 grams per tonne. Possible reserves at Chore, based on unaudited estimates, are 6.9 million tonnes grading 4.4 grams per tonne.

Nelson has also identified five targets in a 3,000-km exploration area surrounding the Zeravshan deposits, and these are thought to contain a possible geological resource of 63.3 million tonnes grading 2.68 grams gold per tonne. A work program in these areas that will run through next year is under way.

Nelson plans to develop the Zeravshan project in three phases. Phase 1, to begin in early 1996, will involve constructing a 700,000-tonne-per-day, carbon-in-leach plant. In addition, the Jilau open pit will be expanded.

Phase 2, which is subject to the completion of a feasibility study, will see a heap-leach operation developed next to the Jilau open pit.

Phase 3 will be focused on completing the Taror underground mine and constructing processing facilities.

Estimated production costs range from US$167 per oz. in 1996 to US$195 in 1999.

Meanwhile, in neighboring Kyrgyzstan, Nelson has acquired a 49% interest in two joint ventures. The first deal covers two gold-copper porphyry deposits: the Andash, where three distinct zones of mineralization have been identified by trenching, drilling and underground development; and the Taldybulak, where one drill hole intersected 222 metres grading 1.31 grams gold per tonne from surface. The second joint-venture agreement is on a 280-sq.-km property containing the Togolok shear-hosted gold deposit, which has been explored by trenching, drilling and underground workings, and the Jangart prospect.

Nelson plans to spend up to US$3 million on exploration of its Kyrgyz deposits over the next year.

In July, Nelson arranged to place 2.25 million common shares at $3 per share for net proceeds of $6.4 million. However, the company states that further funding will be required in order to bring the Zeravshan project into production and complete other planned work in Tadzikistan and Krygyzstan.

Despite the ongoing fighting on the Tajik-Afghan border, Nelson’s chief financial officer, Anthony Williams, says a high mountain range serves to insulate Nelson’s projects and supply routes from hostilities.