With a Siberian gold tailings project already in the works, Armada Gold (ASE) has enlarged its Russian portfolio by acquiring two hard rock mining ventures.
The company has agreed to earn a 49% interest in the Baley-Taseevo gold deposit in the Baley district, and 50% in the Chinah polymetallic deposit in the Chara district. Both projects are in the Chita region of eastern Russia. Late last year, the company acquired a 49% stake in Baltails Ltd., a Russian company that had the right to retreat some 40 million tonnes of tailings from the Baley-Taseevo gold operations. These tailings have an average grade of 0.9 grams gold per tonne and contain an estimated 1.2 million oz. With the acquisition of the hard rock assets, an additional 50 million tonnes of reserves, grading 2 grams gold per tonne, have been added to the Baley project.
In addition, Armada gains an interest in several other fully explored gold deposits within a 35-km radius of Baley, which, in total, represent a resource of about 3 million oz. of contained gold.
On the Baley project, Armada has agreed to pay all costs related to feasibility studies and to construction and operation of any necessary pilot plants. It has also agreed to negotiate and manage all project financing. Armada President Derek Fisher said that, initially, the company will focus on developing the hard rock assets and that the tailings operation would come on stream at a later date.
To earn its interest in the Chinah polymetallic project, Armada has agreed to fund construction of a US$500,000 pilot plant, carry out feasibility studies for the construction and operation of a processing plant, and negotiate project financing.
The deposit contains a potentially open-pit resource of 675 million tonnes grading 0.6% copper, 0.2 grams gold, 0.2 grams platinum, 0.6 grams palladium and 6 grams silver. The large, low-grade zone contains a high-grade resource of 1 million tonnes grading 4.5% copper, 0.5 grams gold, 2.4 grams platinum, 8 grams palladium and 25 grams silver.
In addition to the base and precious metal resources, the deposit contains 1.5 billion tonnes of 45% iron, 10% titanium dioxide, and 0.8% vanadium pentoxide.
The project is suitable for staged development, beginning with the small high-grade resource followed by expansion into the large copper resource and diversification into the iron titanium deposit.
The company hopes to complete preliminary feasibility studies on the projects by the end of 1994.
Armada currently has just over 14.1 million shares and, at presstime, was trading in the 60-68 cents range.
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