Virginijus: See following press release. Stock closed at US$.30 today. Although Kazakhstan has its own economy and own currency there is undoubtedly some trickle down effect from the economic situation in Russia - much as there has been from the effect of the strong USA economy on the Canadian dollar.
Regards
Maureen Luck
NEWS RELEASE
Tasbulat Oil Reserve Base Increased
by 65 Million Barrels of Possible Reserves
Through Extension of Licences
October 7, 1998 Trading: TSE:KMC.U
KazMinCo is pleased to announce a further 65 million barrels of possible reserves has been added to the reserve base of Tasbulat Oil Corporation (Tasbulat) which was previously 72 million barrels proven and probable recoverable oil. KazMinCo has a 40% interest, management control and first right of refusal to purchase the outstanding 60% of Tasbulat.
The additional reserves have been added through the extension of the Aktas Licence to 40Km2 (9,900 acres) and the Turkmenoy Licence to 118Km2 (29,000 acres) together with an increase in the depth limit to the base of the Trias thereby including prospective Triassic reservoirs. The Licence extensions were granted by decrees of the Government of Kazakhstan in July 1998. KazMinCo's interest in the Aktas, Turkmenoy and Tasbulat Licences (see attached figure) in the Mangystau oil province of Western Kazakhstan was originally announced in a December 1997 press release at which time the fields were then evaluated to contain 72 million barrels of proven and probable recoverable reserves.
Tasbulat applied to increase the size of the Aktas and Turkmenoy Licences to exploit the possibility of increasing reserves in structures adjacent to those hosting previously established, proven and probable reserves thus providing a greater oil pool to be developed using the existing infrastructure. After receiving confirmation of the grant of the area and depth extensions, Tasbulat retained Exploration Consultants Ltd. (ECL) to evaluate the prospectivity of the enlarged Aktas and Turkmenoy Licences. This evaluation was based on site visits in addition to geological and geophysical data purchased from Government Agencies in Kazakhstan, including 1377 line Km of good quality seismic data with high density coverage over the fields and surrounding areas. Detailed information was available from 14 wells in addition to stratigraphic data from a further 56 wells. In total this information provides an excellent exploration and prospect mapping database.
As a result of its evaluation, ECL concludes that the Monte-Carlo based mean possible recoverable reserves at Aktas are 21.4 million barrels of oil and 61.4 bcf of gas. At Turkmenoy, ECL estimates a mean of 44.3 million barrels of possible recoverable reserves. Thus the licence amendments to Aktas and Turkmenoy add further possible recoverable reserves of 65 million barrels of oil and 61.4 bcf of gas to the previously established 72 million barrels of proven and probable recoverable oil in the Aktas, Turkmenoy and Tasbulat fields.
The enlarged Aktas and Turkmenoy Licences are valid for 5 years. Production permits will be issued for an additional 20 years on formal approval of the reserves by the State Committee for Reserves of the Republic of Kazakhstan; approval by the Reserve Committee is expected before the end of 1998. A production permit for 25 years for the Tasbulat Field (47 million barrels of proven and probable recoverable reserves) is in place.
These additional reserves can be developed using the existing infrastructure in the Aktas, Turkmenoy and Tasbulat area. Thus the acquisition of the Licence extensions in a region of historical petroleum production greatly adds to the value of the company's assets in the region.
KazMinCo has recently completed a positive feasibility study on its 86%-owned, low cost, Varvarinskoye gold-copper deposit in northern Kazakhstan. The feasibility study identified 2 million gold equivalent ounces of proven and probable mineable reserves with an average annual production of 182,000 ounces for the first three years at a cash cost of US$156 per gold equivalent ounce. Mine life is forecast to be 11 years, with average life of mine operating costs of US$188 per gold equivalent ounce. Full details were released on June 11, 1998. KazMinCo is currently seeking project financing to construct the mine.
KazMinCo is listed on The Toronto Stock Exchange and its shares, quoted in US Dollars, trade under the symbol KMC.U.
On Behalf of the Board
Tony Williams Bert Kennedy
Chairman President & CEO
For further information please contact:
UK North America
Bert Kennedy at: Maureen Luck at:
Kazakhstan Minerals Corporation Kazakhstan Minerals Corporation
Cavendish House P.O. Box 182
40 Goldsworth Road MADEIRA PARK, BC V0N 2H0
WOKING, SURREY GU21 1JT CANADA
ENGLAND
Tel: 1 604 883 2565 or
Tel: +44 (0) 1483 729 995 1 800 367 1735
Tony Williams at: Europe
Dragon Capital Corporation
22 Grosvenor Square D. Williamson at:
LONDON W1X 9LF David Williamson Associates Ltd.
ENGLAND 15 St. Helen's Place
LONDON EC3A 6DE
Tel: +44 (0) 171 491 2525 ENGLAND
Tel: +44 (0) 171 628 3989
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein
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