A private placement will give Goldbelt Resources (VSE) an initial $4.3 million to fund further development of its gold tailings joint venture in Kazakhstan.
The junior is earning a half interest from the Kazakhstanian government by advancing the project to the feasibility stage.
The placement consists of 4.75 million units at 90 cents each and includes warrants for an additional 3.25 million shares exercisable at $1.05 each to June 15, 1996.
Goldbelt President Paul Morgan says a final bankability study is nearing completion. Previous estimates put the capital cost at US$43 million and Goldbelt has already secured a commitment from Pegasus Gold (VSE) to provide US$15 million in funding. Pegasus loaned Goldbelt US$3 million earlier this year as part of the funding agreement, and both loans are convertible at US49.5 cents per share.
The Leninogorsk gold-silver tailings project contains about 150 million tons of tailings in four deposits grading an average of 0.018 oz. gold and 0.14 oz. silver per ton.
In the first five years of production, a high-grade portion of the resource is expected to yield more than 600,000 oz. gold and 2.5 million oz. silver. Cash costs are expected to be at the “low end” of world mining industry averages.
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