Goldbelt closer to production at Leninogorsk tailings

Funding and permitting are moving ahead at Goldbelt Resources’ (VSE) Leninogorsk gold tailings project in Kazakhstan.

On the same day that the Overseas Private Investment Corporation (OPIC) signed an agreement to fund up to US$35 million of the project cost, the Kazakh government issued an operating licence, paving the way for construction.

OPIC, an agency of the U.S. government, encourages American companies to invest overseas by providing loans and political risk insurance. The new funding brings Goldbelt one step closer to financing the estimated US$83.5-million capital cost. Pegasus Gold (TSE) has already agreed to lend a further US$15 million on top of the US$3 million it has lent to the company already. The Pegasus funding is contingent on Goldbelt raising the balance of the capital cost. Pegasus can convert both loans to common shares at a price of US49.5 cents.

Michael Muzylowski, co-chairman of Goldbelt, expects the balance of the capital cost financing to be completed shortly.

The project is a 50-50 joint venture with Leninogorsk Polymetallic Combinat, a division of the Kazakh government. Minable reserves are estimated at 112 million tons grading 0.022 oz. gold and 0.17 oz. silver per ton. Construction is expected to get under way in the first quarter of 1995 and be completed by July, 1996. Output is estimated at 1.6 million oz. gold and 5.4 million oz. silver over a 15-year mine life, with an overall cash cost of US$175 per oz. including silver credits. Production in the first full year of operation is projected at 151,500 oz. gold and 700,000 oz. silver.