Spokane-based Pegasus Gold (TSE) has agreed to a 50-50 joint venture arrangement with Goldbelt Resources (VSE) on the Kazgold tailings project in Kazakhstan.
Formerly known as the Leninogorsk project, Kazgold is currently a joint venture between Goldbelt and state-owned Leninogorsk Polymetallic Combinat. A previously announced convertible loan agreement between Pegasus and Goldbelt will be cancelled as a result of the new arrangement. Under the original agreement, Pegasus would have ended up owning 54% of Goldbelt upon advancing a further US$15 million of the loan.
Under the proposed arrangement, Goldbelt will repay the US$3 million advanced to the company to date. Pegasus
will, in turn, lend Goldbelt US$500,000 plus an additional US$1 million over the course of 1995. Pegasus will manage the joint venture and will be required to match the roughly US$6.8 million that Goldbelt has spent on the project to date. Upon Goldbelt’s contributing an additional US$2 million, Pegasus will lend Goldbelt up to US$5 million for its share of joint-venture costs. Goldbelt will repay all loans from its share of future production cash flow.
A bankable feasibility study by Kilborn Engineering Pacific has determined a minable reserve of 112 million tons grading 0.022 oz. gold and 0.17 oz. silver per ton. Production is estimated at 1.6 million oz. gold and 5.4 million oz. silver over 15 years, at an overall cash cost US$175 per oz. The capital cost is estimated at US$83.5 million, of which US$35 million is secured by Overseas Private Investment Corp.
The project is expected to start up in the spring of 1997.
Be the first to comment on "Goldbelt to JV Kazgold with Pegasus"