Centerra Gold reported in early February that the Mongolian Parliament has passed a resolution setting the state ownership interest in Centerra’s proposed Gatsuurt gold project at 34% and authorizing the government to complete negotiations with Centerra on the terms of such ownership. Final agreements will include a deposit development agreement and an investment agreement.
Assuming successful completion of these agreements, Centerra will undertake economic and technical studies to update the existing studies on the project, which were completed and published in May 2006. As part of this work, the company will undertake a program of exploration drilling, aimed at substantially expanding the Gatsuurt oxide resource, and additional hydrogeological drilling.
Following completion of the final agreements, Centerra expects to provide an update on the timeline for completion of these studies and drilling and for the start of project development.
Centerra CEO Scott Perry said, “The parliamentary resolution is a very important next step in advancing the Gatsuurt project. The project represents an exciting opportunity to use Centerra’s existing Boroo mill and other infrastructure to develop the 1.6-million-oz Gatsuurt deposit with very modest initial capital investment.
“The company will now focus on finalizing the investment agreements with the government of Mongolia. We look forward to developing Gatsuurt so we can continue to operate in Mongolia for many more years to come.”
The Gatsuurt project is located approximately 55 km by road from Centerra’s existing Boroo mine and mill. The company plans to truck Gatsuurt ore to the Boroo mill for processing.
The current plan calls for processing approximately 3.6 million metric tons (mt) of CIP ore (oxides) at an average grade of 2.86 g/mt through the existing Boroo facility during the Gatsuurt project’s first 2.5 operating years. During this time, a BIOX facility will be added to the Boroo plant to process the remaining Gatsuurt sulphide ores, which total approximately 13.5 million mt at an average grade of 2.92 g/mt.
The Gatsuurt project’s estimated mineral reserves as of December 31, 2014, totaled 17.1 million mt at an average grade of 2.9 g/mt gold, containing 1.6 million oz of gold using a cut-off grade of 1.4 g/mt. The reserve estimate was based on a gold price of $1,300/oz.