12:54 Indochina Goldfields Gets Positive Bakyrchik Project Report
SINGAPORE (Dow Jones)--Indochina Goldfields Ltd. (T.ING) said it has
received a final engineering report and production plan for Phase I
development of the Bakyrchik Gold Project in Kazakstan, which concludes that
the first phase of the project will produce 125,000 ounces of gold a year.
In a news release, Indochina said it will now proceed with project financing
and initiate the plan's proposed 18-month construction schedule. It said it
expects the first gold pour at Bakyrchik in the second half of 1999.
The company said the report, prepared by Kvaerner Metals Davy of Toronto,
includes a production plan based on several operating assumptions, including
that 512,500 metric tons of ore a year will be mined from the existing
underground operation. It said the result will be the production of between
120,000 and 130,000 ounces of gold a year, at competitive costs, for 15 years.
Indochina said the Kvaerner report estimates that the project will have cash
operating costs below $200 an ounce for the first five years and average $214
an ounce for the 15-year term of the report. This cash cost, when coupled with
an estimated capital cost of about $100 million, generates an internal rate of
return of 18.5%, at a gold price of $362.50 an ounce, it said.
The company said going forward, the mine is capable of multiple expansions
that eventually could bring production levels as high as 600,000 ounces of
gold a year. It said Kvaerner based its report on a measured, indicated and
inferred resource of 7.45 million ounces within the definitive feasibility
study area. Within this mineralized envelope, a proven and probable reserve of
9 million tons grading 7.90 grams a ton has been calculated, using a mining
cut-off grade of 4.48 grams a ton to yield 2.01 million ounces of recovered
gold.
Indochina Goldfields said it currently holds a direct 80% ownership interest
in the Bakyrchik gold mine through a recently restructured joint venture
partnership with BKG Resources PLC, formerly Bakyrchik Gold PLC. It noted it
is also the mine operator. The company said it continues to hold a 27.9%
equity interest in BKG Resources, which constitutes an additional 6% indirect
interest in the Bakyrchik mine.
Indochina Goldfields is a mining company. |
