Shareholders of Goldbelt Resources (VSE) recently ratified the company’s plans to develop mineral resources in two republics of the Commonwealth of Independent States (the former Soviet Union).
Under a deal to acquire options on two large mineral projects in the republics, Goldbelt will issue 1.2 million common shares to Black Swan Gold Mines (TSE) and just over eight million shares to a Luxembourg corporation which holds the options.
Goldbelt can earn a 50% interest in the two properties from the republics by spending an estimated US$5 million to bring the two projects to feasibility. An initial feasibility is now complete on the gold recovery project in Kazakhstan, and discussions are now under way with international lenders regarding financing arrangements.
Capital cost of the project is estimated at about US$36.3 million and involves the processing of an estimated 150 million tons of polymetallic mine tailings grading 0.018 oz. gold and 0.14 oz. silver per ton. Mike Muzylowski, chairman of Goldbelt, said financing talks in Europe are progressing very well and he predicted that the entire capital cost will be debt financed.
The project feasibility study, using US$350-per-oz. for gold and US$4-per-oz. for silver, estimated gross revenue over an initial 10-year period at $346.4 million with a cash operating cost of about $45.4 million over the period. The feasibility estimates a “payback” of less than one year and an overall project life in excess of 25 years.
Goldbelt hopes to begin construction in the third quarter of 1992 on the gold recovery operation with production anticipated for late 1993 or early 1994. The project is expected to produce about 126,000 oz. gold and 695,000 oz. silver during the first two years at an estimated cost of less than US$100 per oz. including silver credits.
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