JOHANNESBURG (miningweekly.com) – London-listed Georgian Mining and its joint venture (JV) partner Caucasian Mining have agreed on terms for the development of the Kvemo Bolnisi (KB) copper/gold project, in the Tehtyan Belt in Georgia.

The parties have settled on funding the JV company, Georgian Copper and Gold (GCG), on a 50:50 basis, Georgian said in a statement on Thursday.

In terms of a 2015 agreement, Georgian had to contribute $6-million towards operating costs of GCG in return for its 50% stake, while Caucasian transferred the licence into the JV.

Following the completion of an initial two-year work programme and the satisfaction of the commitment of $6-million, Caucasian and Georgian have put in place a 2018 work programme, which focuses on the further development of KBE GZ2 gold oxides, initially with an in-fill drilling programme for resource definition and, in parallel, further testwork and environmental and feasibility studies to achieve the target of a starter mining operation at GZ2.

The work programme also includes further testing and expansion of the copper/gold resources beneath the oxides at GZ2 and Copper Zone 1, which contribute significant value to the future operation.

Georgian further announced that GCG had entered into a memorandum of understanding (MoU) with Caucasian sister company RMG Gold, relating to the mining and processing of ore from the Kvemo Bolnisi East (KBE) target.

The MoU sets forth a framework for the detailed terms and conditions to be agreed relating to a mining and processing agreement (MPA). The MoU and the MPA relate to KBE, as well as the gold oxides and copper-sulphides.

The parties have agreed that the ore from KBE will be mined and hauled to be processed at one of RMG's processing plants at the Madneuli and Sakdrisi mines.

“Initial production from the gold oxides will serve as a starter operation and pave the way for the subsequent exploitation of the primary copper-gold sulphide ores at KBE. We also firmly believe that KB and the licence area as a whole have excellent potential for a major discovery of large-scale epithermal gold-copper mineralisation, and this is the focus of our wider exploration programme,” said Georgian MD Greg Kuenzel.