The government of Kazakhstan has given the go-ahead for the Leninogorsk gold tailings project, a joint venture between Goldbelt Resources (VSE) and state-owned Leninogorsk Polymetallic Combinat.
The partners now have a right to export and sell precious metals to the world market, conditional on a right of first refusal held by the National Bank of Kazakhstan (which can purchase the production according to the London Bullion Market Association price in U.S. dollars on the day of the trade). Goldbelt President Paul Morgan says the cabinet decree — which includes provisions for gold export, the right to off-shore banking, tax incentives and international arbitration — will help the company arrange the remaining project financing.
The capital cost is estimated at US$83.5 million. The joint venture has a commitment from the Overseas Private Investment Corp. for up to US$35 million in funding. A further US$15 million will come from Pegasus Gold (TSE) through a loan facility convertible into common stock at US49.5 cents per share. Goldbelt is arranging the balance.
A final feasibility study outlined a minable reserve of 112 million tons grading 0.022 oz. gold and 0.17 oz. silver per ton. The operation is expected to produce 1.6 million oz. gold and 5.4 million oz. silver over its 15-year life at a cash cost of US$175 per oz. gold.
Construction is expected to get under way in the second quarter of 1995, with startup slated for late 1996.
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