Having completed first-phase engineering studies, Arian Resources (ARA.U-T) is moving forward with plans to build a mine and associated infrastructure at the Julietta property in the Madagan region of the Russian Far East.
The mine plans are based on initial reserves and resources of 1.1 million tonnes grading 20.05 grams gold and 339.8 grams silver per tonne. Production during the first three years is expected to average 127,000 oz.
gold-equivalent annually, and then decline to 72,000 oz. for the next six years.
Capital costs are estimated at US$55.9 million, while cash operating costs are expected to average US$146 per oz. gold-equivalent, including all revenue-based royalties and direct taxes.
Arian says its negotiations with Russian authorities have resulted in the net smelter return royalty being reduced to 2% from 8%, whereas the mineral resource tax was converted to a single payment from initial production revenue. Other tax rates were reduced, bringing the overall tax burden to 25%.
The company is negotiating with engineering firms for a fixed-price contract for the project. Construction is expected to start this summer.
The engineering plans include a strategy for plant expansion based on the expectation that additional resources will be developed close to the mine and elsewhere on the property. Believing the geological province hosting the Julietta deposit contains potential for other discoveries, the company is investigating several opportunities in the region.
Arian currently owns 50.5% of a Russian joint stock company, which, in turn, owns the Julietta licence and a surrounding land package. The company is negotiating to increase its ownership in the stock company.
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