Satisfied with its due diligence review, Pegasus Gold (TSE) has agreed to lend US$3 million to Goldbelt Resources (VSE) to help it secure financing for its Leninogorsk gold-silver tailings project in Kazakhstan.
The agreement includes a loan of a further US$15 million for project capital costs, after the company receives a commitment for third-party financing.
On completion of the US$15-million advance, the entire US$18 million will be converted into common shares of Goldbelt at 65 cents each (US49.5 cents), giving Pegasus a 61% interest in the company.
The capital cost of the tailings project is estimated at US$43 million and consultant Kilborn Engineering Pacific has been retained to complete a final feasibility study.
The project, owned jointly by Goldbelt and the Kazakh government, includes four tailings deposits totaling 150 million tons grading 0.018 oz. gold and 0.14 oz. silver per ton.
In early 1992, a preliminary feasibility study estimated the project would produce 608,000 oz. gold and 2.5 million oz. silver in the first five years of operation. The cash cost, including silver credits, would be about US$100 per oz.
The output estimate was based on mining of a higher-grade reserve of 2.8 million tons averaging 0.072 oz. gold and 0.58 oz. silver during the first two years of operation.
Goldbelt co-chairmen Michael Muzylowski and Paul Naughton state that “the alliance with Pegasus brings to Goldbelt a wealth of mining expertise that will enhance our opportunities in the mineral-rich country.”
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