JOHANNESBURG (miningweekly.com) - A prefeasibility study (PFS) has confirmed the economic viability of the Kyzyl gold project in Kazakhstan, where operations could start in 2013.
The Kyzyl project is wholly-owned by Altynalmas, in which TSX-listed Ivanhoe Mines owns a 50% stake.
The study was based on an underground mining operation producing an average of 368 000 oz/y of gold during an initial mine life of up to ten years.
The company said that the current drilling programme converting the project's mineral resources to reserves had been successful, ensuring confidence in the life-of-mine case, with the potential to extend the mine life to up to 16 years with the present estimated resources.
The project has an estimated initial mineral reserve of 3,78-million ounces of gold.
Ivanhoe Mines executive chairperson Robert Friedland said that a high probability of increasing the current mineral reserves and resources existed through the ongoing infill and exploration drilling programme and that the potential to discover new high-grade gold mineralisation along strike and to depth was also a possibility.
Altynalmas Gold CEO David Woodall said that the study had verified the quality of the mineral resources and that the proprietary metallurgical processes that had been developed allowed the it to proceed with development of the project as quickly as possible.
"The study also has confirmed the economic viability of the project mineral resources, and upgraded them to probable reserves at an outstanding conversion rate averaging 98%. It considered all aspects of a proposed operation, including a mine production plan, metallurgy and processing, and capital and operating costs."
The mineral reserves were used to forecast a base case PFS production schedule for an underground drift-and-fill mining operation with a steady-state production of 1,5-million tons a year.
Preproduction development of the mine was expected to start in 2011 and plant start-up was envisioned to be in the second quarter of 2013.
Total gold produced over the life of the mine was estimated at just over 3,3-million ounces at a metallurgical recovery of 88%.
Altynalmas said that it planned an additional drilling programme of 50 000 m for the rest of the year.