Ivanhoe Mines is planning to bring a major gold prospect in Kazakhstan into commercial production as soon as possible, according to Ivanhoe’s executive chairman, Robert Friedland.

Speaking at the sixth annual Asia Mining Congress in late March, Friedland said that Ivanhoe Mines has increased its interest from 49% to 50% in Altynalmas Gold, the company that holds 100% ownership of the Kyzyl project. Ivanhoe and Altynalmas Gold combined their interests in two significant Kazakhstan gold deposits into a consolidated project called Kyzyl Gold. Ivanhoe and Altynalmas Gold will proceed to advance the project under the Altynalmas Gold umbrella.

“With this consolidated ownership in Altynalmas Gold, we now are positioned to rapidly complete a pre-feasibility study and move ahead with the full feasibility study to ensure that the Kyzyl Project stays on a direct track to become one of Central Asia’s leading gold producers,” Friedland said. David Woodall, president of Ivanhoe Mines’ gold operations, has been appointed CEO of Altynalmas Gold.

The Kyzyl Project contains the Bakyrchik Deposit—described in an Ivanhoe press release as one of the world’s highest-grade and largest undeveloped gold systems—and the nearby Bolshevik gold deposit. A drilling program now is under way to support an updated resource estimate and feasibility studies to secure project financing.

Located approximately 100 km southwest of Ust-Kamenogorsk, the industrial center of East Kazakhstan, the Kyzyl Project is served by a railway and an electricity grid, and also has existing underground workings, shafts and minesite infrastructure.

The Kyzyl gold system consists of a series of mineralized lenses, or lodes, lying within a large, 15-km-long shear zone. According to Ivanhoe, the geological potential remains untested along 13 km of strike and at depth.

Following completion of the pre-feasibility study, Altynalmas Gold intends to proceed with the detailed design of a phase-one, 1.5-million-mt/y commercial plant that will treat head grades in the range of nine or more grams of gold per tonne.

Woodall said that Altynalmas Gold in-
tends to pursue sufficient financing arrangements and the necessary regulatory approvals to initiate project development. Altynalmas is targeting to begin mine construction in 2011, with production starting in 2013.

In addition, Altynalmas Gold will continue to advance the project with a 6,000-m, near-surface drilling program at the Bakyrchik property in April to test targets for potential, initial open-pit development. Altynalmas also plans to continue to delineate extensions of the mineralization along strike and at depth to follow-up a significant, high-grade gold intercept that indicates the continuation of the gold mineralization system at depth and along strike.

Woodall said a key factor in unlocking the value of the Kyzyl project has been significant advances made in adapting proven roasting technology and the application of innovative process solutions developed by New Orleans-based research company Crescent Technology Inc.

According to Woodall, processes developed by Crescent Technology evolved through extensive test work performed during a series of continuous pilot-plant operations at Hazen Research, Ltd., of Golden Colorado. The testing program has enabled Altynalmas to achieve gold recoveries of between 86% and 90% from the Bakyrchik ore using fluidized-bed roasting.

The majority of the gold in the Kyzyl Shear is encapsulated by arsenopyrite and, to a lesser extent, pyrite. The associated sediments contain up to 4% carbon, which is burned in the roasting process.

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