MK Gold bearish on Asian gold play

A property evaluation has prompted MK Gold (NASDAQ) to write off a portion of its investment in the Jerooy gold project in Kyrghyzstan.

The company will record a charge for the quarter ended Dec. 31, 1995, of about US$6 million (or 31 cents per share), which represents 43% of the total investment of US$14 million in the project.

MK Gold’s decision was based on studies that examined the economic viability of developing an underground mine and mill, plus an open-pit, heap-leach mine. Neither study resulted in satisfactory projections.

Meanwhile, the company has commissioned Kilborn Engineering to perform another study on the Central Asian project. Due in March, it will focus on the potential for open-pit mining and milling.

MK Gold will discuss the outcome with representatives of the Kyrghystan government. And if the project is not found to be viable, the company will write down its remaining investment.