European Mnls finances Varvarinskoye

Vancouver — European Minerals (EPM-T) has raised US$80 million in debt financing, underwritten by two banks, for development of the Varvarinksoye copper-gold project in northern Kazakstan.

The 300-sq.-km property is 130 km southwest of Kustanai (pop. 200,000) in an area with a history of large-scale mining. Roads and electricity are in place, though power will have to be upgraded.

A feasibility study suggests the project could be mined profitably at a capital cost of US$94 million. The stripping ratio is pegged at 4-to-1.

At prices of US$400 per oz. gold and US$1.10 per lb. copper, the net present value is estimated at US$371, with an internal rate of return of 41% and a payback period of 22 months.

Mineralization consists of stratiform deposits of massive disseminated sulphide ore, vein-disseminated sulphide ores and stockworks, and supergene oxide ores and gossans. Mining would entail a series of pits.

The yearly mining rate is estimated to be 4.2 million tonnes of ore and 17.8 million tonnes of waste. Gold recovery from carbon-in-leach would be 87%, gold recovery from concentrate and flotation and tailings would be 76%, and copper recovery from flotation would be 84%.

The operating cost is estimated to be US$108 per oz. gold in the first six years and US$170 per oz. over the mine’s 15-year life span (including copper credits). When capital costs are included, the life-of-mine operating cost rises to US$219 per oz.

Varvarinskoye has a proven and probable reserve equivalent to 2.3 million oz. gold and 269 million lbs. copper, based on prices of US$375 per oz. and US$1 per lb.

CIL ore comprises 45.3 million tonnes grading 1.06 grams gold and 0.06% copper, equivalent to 1.5 million oz. gold. The float ore comprises 15 million tonnes grading 1.66 grams gold and 0.81% copper, or 800,000 oz. gold and 269 million lbs. copper.

During the first decade, Varvarinskoye is expected to produce about 145,000 oz. gold and 18.4 million lbs. copper per year.