Trans-Siberian Gold plc
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Asacha

Location

Asacha is located in the Kamchatka krai, occupying a 1,000 km peninsular in Far East Russia. By road Asacha is some 150 kilometres to the south of the port of Petropavlovsk - Kamchatsky, the regional capital. The first 90 km of the road is mostly paved, being the road to the Mutnovskaya geothermal power station. From the turn-off to the site is a 60 km long unpaved all-weather road which has been constructed by the company.

Map of the Kamchatka Region (new window)

Environmental

. Asacha Environmental Assessment, Nov. 2004 PDF (2.7Mb)

Ownership

In August 2010 the Company acquired the remaining 4.97% minority interest in Trevozhnoye Zarevo (TZ) which holds the mining licence for the Asacha deposit (24km2).

History

  • VNIPI Feasibility Study - 2003
  • Additional Metallurgical Testwork - 2005-2007
  • Environmental Impact Assessment - 2005
  • Environmental Management Plan - 2006
  • New Mineral Resource/Ore Reserve Estimate - 2006
  • Development mining commenced - 2007
  • Business Plan and Capital Cost Update - May 2008
  • Gold production commenced - September 2011

Status

From 1 January 2011 until the beginning of September 2011 mine developing and preparation works, by-product extraction works and exploration works comprised more than 2,250 metres and 23,000 m3.

In June 2011 stoping activities began with the extraction of more than 600 tonnes of gold bearing ore. By 1 September total ore extracted in 2011 (both from mine development and stoping activities) amounted to more than 14,700 tonnes and the ore stockpile ready for processing had increased to approximately 75,000 tonnes, with an average grade of about 9 g/t.

During 2011 the Company has focused its efforts on completing the construction of the gold plant and infrastructure to facilitate the start of gold production. By the end of July the plant building was complete, with equipment and technological piping installed. The essential infrastructure objects, including tailings storage, repair shop, sewage, water treatment facility, fire station, fuel storage and main engineering networks were ready for use. The cyanide and explosives storage facilities were commissioned.

The site's power unit, comprising 4 diesel generators with a total capacity of 4 megawatts, was commissioned, with the gold plant and other facilities being switched to the permanent power supply.

The completion of the main construction activities enabled the Company to start the plant commissioning process. Mechanical checks and hydraulic tests of the plant equipment and piping were conducted and operations undertaken using waste rock. At the beginning of September chemical reagents and low grade ore were loaded into the system and the first trial smelting on 24 September 2011 produced 3 gold dore bars with a total weight of approximately 8.5 kg. It is expected that these will be shipped to the refinery in early October, together with gold dore from the second smelting.

The legal framework required for the sale of gold production is now in place. Gold and silver sales and purchase agreements with Sberbank are signed, as well as agreements for the transportation and refining of the metal.

The total capital cost of the Asacha project prior to commencement of production is now estimated at $136.8 million, net of $10.8 million VAT recoveries, compared to the May 2011 estimate of $130.2 million (net of $10.1 million VAT recoveries). The total project cost includes pre-commissioning mining and plant costs of $5.9 million, other pre-operating expenditure of $40.4 million, "first fill" equipment spares and consumables of $1 million and contingency of $0.5 million. The $6.6 million increase in pre start up costs reflects the longer than anticipated plant commissioning phase and includes $2 million additional mining and plant costs and $3m in other pre-operating expenditure.

At a gold price of $1,000/oz, Life of mine ("LOM") cash costs on an all equity basis on total gold production of 590,000 oz are forecast at $227/oz, before taking account of a $34/oz credit from silver production (based on an assumed silver price of $20/oz). Cash costs including all royalties and taxes (in total $95.6 million, net of VAT recoveries) on an all equity basis are forecast at $386/oz. Total costs on the same basis, after depreciation of all capital expenditure (including $28.4 million post start up) and pre-start up mining and other operating expenditure, are forecast at $666/oz, giving a $334/oz margin at a gold price of $1,000/oz.

Actual expenditure on the project up to the end of July 2011 amounted to $127.8 million, net of $10.3 million VAT recovered. The remaining costs prior to the commencement of gold production at the end of September 2011 are estimated at $9.0 million, net of further VAT recoveries of $0.5 million, comprising:

    US$ million
Capital expenditure Mine and mining equipment and facilities 0.9
  Gold plant, site facilities and tailings storage (1st phase) 3.9
  Power supply and other infrastructure 1.2
  Contingency 0.5
Total capital   6.5
Other costs Pre-production mining, spares and consumables and other operating costs 3.0
    9.5
Less VAT recoveries   0.5
    9.0

A further $28.4 million of capital expenditure will be incurred after the commencement of production (including $6.7 million on mine development, $5.0 million on the plant, tailings storage and solid waste landfill, $11 million for the completion of the external power line and $4.4 million contingency).

Strategy

The mine plan and design remains based on ore extraction by underground mining methods only, with the processing of the free-milling ore taking place in a conventional carbon-in-leach process plant.

Planned Production

  • Throughput: 150,000 tonnes pa mine/plant to 200,000 tonnes pa
  • Mine: Underground sub-level shrinkage (openface/ore shrinkage)
  • Plant: Carbon-In-Leach (CIL)
  • Production: c. 84,000 oz of gold and 160,000 oz of silver pa
  • Life: c. 7 years