Central Asia Resources announced in late September 2011 it has started mining at its Dalabai gold project in Kazakhstan. Central Asia Resources acquired the project in 2008 and has focused on it as an easy-to-develop, heap leach operation that could generate early cash flow to provide funding for further exploration and development at other company projects in Kazakhstan. The project was developed at a low capital expenditure of $10.7 million, and cash costs of production are expected to average $540/oz.

The Dalabai project is located a 2.5-hour drive north-northeast of Almaty, Kazakhstan’s largest city, with a major highway to the deposit. Mining started at 1,000 mt/d of ore and is being ramped up to 1,500 mt/d by year-end 2011. Crushing started at 500 mt/d and is also being ramped up to 1,500 mt/d. Gold production was scheduled to begin during the fourth quarter of 2011.

Mining and crushing at 1,500 mt/d is expected to yield an average production of 15,000 oz/y of gold. Planned increases in crushing capacity will double production to an expected 30,000 oz/y in 2012. Construction of the processing facility and the application for the minerals processing license were on schedule.

The current resource at Dalabai totals 124,000 oz of gold in 3.98 million mt grading 0.97 g/mt. The resource is primarily in three out of eight identified mineralized zones, with drilling planned during the fourth quarter of 2011 to increase resources in the other zones and mine life. The northeast part of the license area was acquired in 2010, and a regional exploration program to identify potential mineralization is planned for 2012.

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