Nelson Gold puts Jilau mine back on-stream

London-based Nelson Gold (NLG-T) has resumed operations at the Jilau open-pit mine in Tajikistan.

The company recently made its first gold sale, exporting and selling 12,700 oz. of gold bullion from the Jilau mine. The proceeds have been deposited in Zeravshan Gold’s offshore bank account.

“It is, we believe, the largest single private shipment of gold from the former Soviet Union,” says Nelson President Glenn Laing.

Nelson hopes to export another shipment of bullion before the end of the year.

The Jialu mine is owned by Zeravshan Gold, which is 44% owned by Nelson, and 51% by the Tajikistani government. A division of the World Bank, International Finance, holds the remaining 5%, as well as an option to purchase 4 million Nelson shares.

The carbon-in-leach plant at Jilau is operating at design capacity, and construction of a heap-leach facility is under way. The shutdowns, however, have lowered expected gold production for 1996 to 30,000 oz. from 80,000 oz.

Despite celebrating its first gold pour last January, Nelson, had difficulty ratifying its June 1996 protocol agreement with the Tajikistani government.

As a result, shipments of gold for sale abroad were delayed (T.N.M., Nov.

25/96).

The impasse, according to Nelson, related to inaction on the part of the government to implement taxation and royalty rates, the re-registration of the joint venture and the establishment of offshore banking arrangements.

Nelson suspended operations in September, and again in October, in order to pressure the government into action. Nelson and the government have since resolved their differences, and mining and milling operations resumed at the Jilau mine on Dec. 3.

“The government did not have a problem with exporting gold,” explains Laing.

“The problem was putting together an island tax and legal regime specific for this joint venture, such as Newmont Gold has at Murantau [in Uzbekistan] and Cameco has at Kumtor [in Kyrgyzstan]. That [regime] took time for the prime minister to get through the system.”

To date, Nelson has invested US$54 million in its Tajikistani gold operations, which include the Jilau mine, the Taror underground project and several open-pit, heap-leach exploration targets in the Zeravshan Valley.