THE GLOBAL SEARCH FOR GOLD SPECIAL — Arian Resources chases pot of gold in former U.S.S.R.

While many of the large, undeveloped gold deposits in the former Soviet Union will have to dig deep into the pockets of a major in order to move forward, several junior companies are succeeding in acquiring projects with comparatively modest potential.

Among these is the Julietta gold-silver project in the Russian Far East, held 50.5% by British-based Arian Resources (ARCO.U-C). The company says it recently received an independent feasibility study that “confirms the technical feasibility and economic viability of the project.”

The study, by Davy International, is based on current proven and probable reserves established on three veins of the 14-vein, epithermal gold-silver system named Julietta. Initial minable reserves stand at 540,000 tonnes with an average grade of 24.7 grams gold and 407.5 grams silver per tonne.

In addition, projecting no further than 50 metres from existing diamond drill-hole intersections, Davy has calculated a possible geological resource of about 492,000 tonnes at a grade of 19.5 grams gold and 341.9 grams silver.

Total capital and construction costs for the mine, plant and infrastructure are estimated at US$56 million. Operating costs are estimated at US$123 per oz. gold-equivalent, with total operating and capital costs estimated at US$244 per oz.

The deposit will be accessible by ramp, and mining will be carried out by cut-and-paste fill at a daily extraction rate of 350 tonnes, to produce 122,500 tonnes per year. Arian describes ground conditions as “excellent” and expects to achieve a mining recovery of 97.5%.

The metallurgy at Julietta is described as “simple,” with recoveries of 95% for gold and 85% for silver achieved by direct cyanidation at laboratories in Russia and Canada. Initial annual production is estimated at 105,000 oz. gold-equivalent.

Arian previously sought proposals from several engineering firms, and is about to choose a contractor to build the mine, subject to financing arrangements and board approval.

Meanwhile, Arian continues to explore along strike of the main veins. Four recent holes returned: 0.7 metre of 11.2 grams gold and 41.6 grams silver; 0.5 metre of 181.6 grams gold and 133.8 grams silver; 0.5 metre of 119.2 grams gold and 3,603.8 grams silver; and 1.7 metres of 13.6 grams gold and 418.2 grams silver.

The company says these results are typical of an epithermal, “bonanza” deposit such as Julietta. Along with these targets near the mine, Arian is exploring other deposits within its large licence. Mapping and sampling have already identified several targets, including one viewed as prospective for bulk-tonnage, open-pit gold deposits.

The company is also pursuing other targets in the Madagan region, including two gold anomalies within granite stocks that will be further prospected this year.