Ivanhoe Mines reported in late February that an independent feasibility study has increased the mineral reserve estimate at Altynalmas Gold’s Kyzyl gold project in East Kazakhstan province, Kazakhstan to 5.76 million oz of gold.
Ivanhoe holds a 50% interest in Altynalmas. The reserve estimate is based on an underground mining operation producing an average of 337,000 oz/y of gold during an initial mine life of up to 15 years. The project also has 7.35 million oz of indicated resources.
The Kyzyl project encompasses re-development of the Bakyrchik underground mine and the construction of a new processing plant incorporating fluidized-bed ore-roasting technology. “With our successful and continuing resource delineation and reserve conversion, the confirmation of the gold recovery process, and the support of the government of Kazakhstan, we are pleased to be in a position now to start the construction and development of a state-of-the-art operation that will integrate the best available technology and launch a new era of gold production in the region,” Altynalmas President and CEO David Woodall said.
Mine production is planned at a rate of 1.5 million mt/y. Pre-production capital expenditures are estimated at $1.124 billion. Cash costs of production are estimated at $483/oz, and total production costs are estimated at $759/oz.
Two-stage fluidized-bed roasting technology would recover 88% of the contained gold. Altynalmas adopted this processing approach based on pilot-plant test work supervised by Crescent Technology and undertaken by Hazen Research over the past three years. Integral to the process is the scrubbing of gases liberated during roasting and, in particular, the development of an innovative and proprietary ore treatment process that produces an environmentally stable iron arsenate mineral byproduct that meets international environmental standards. Altynalmas has filed a provisional patent application covering the technology with the U.S. Patent and Trademark Office and with Kazakh authorities.
Altynalmas Gold is continuing its drilling program to expand and upgrade the NI 43-101 compliant inferred and indicated resource estimate at the Kyzyl project. Exploration drilling totaled 84,552 m in 2011 and is planned at 40,000 m in 2012.
The gold deposits at the Kyzyl project consist of a series of mineralized lenses, or lodes, lying within the large Kyzyl shear zone. Gold mineralization is hosted within sheared, carbonaceous sediments of the fault zones and principally is contained within arsenopyrite sulphide mineralization occurring in association with quartz stockworks, which crosscut and parallel the foliation of the sediments.
Recent significant drill intercepts of high-grade gold mineralization, which approximate true widths and confirm the higher-grade zones within the Bakyrchik resource wireframes, include 27 m grading 16.42 g/mt gold and 22 m grading 18.69 g/mt gold in Lens 1; 5 m grading 9.71 g/mt gold in Lens 9; and 3 m grading 46.20 g/mt gold and 13 m grading 8.68 g/mt gold in Lens 12.