Russia’s Federal Agency of Environmental, Technical and Nuclear Supervision has approved a construction feasibility study for Bema Gold‘s (BGO-T, BGO-X) 75%-owned Kupol gold-silver mine project in the Far East Chukotka region.
The study covers the project’s geology, mining, milling, tailings storage, infrastructure, civil defence measures, and environmental protection.
Bema says the approval represents a “key milestone” in Kupol’s development, and a condition on the draw down of the US$400 million project loan arranged late last year. Drawdown is expected later this month.
Based on a 2005 feasibility study, Kupol is projected to produce more than 550,000 oz. gold and 5.8 million oz. silver annually over the initial 6.5-year mine life. Cash costs are estimated at US$47 per oz. and total costs at US$88 per oz., after silver credits. The mine is scheduled to begin producing in mid-2008.
Bema has budgeted US$140 million for development and construction during 2006. Equipment and supplies are being amassed in anticipation of construction of the mill building, runway and permanent 600-man camp. Open-pit and underground development work is also planned.
In all, construction carries a price tag of US$470 million.
Earlier this year, Bema boosted indicated resources at Kupol by 15% to 7.4 million tonnes of 20.2 grams gold and 244.2 grams silver per tonne, based on a cutoff grade of 6 grams gold. The inferred category contains 3.9 million tonnes running 13.7 grams gold and 177 grams silver.
The new indicated resources are contained within the mine’s current primary development plan. An updated reserve estimate and mine plan is due out in May.
Looking ahead, Bema plans a 20,000 metres worth of diamond drilling to test other veins, structures and extensions of the main Kupol vein, which remains open in all directions. Drill is scheduled for late May.
The government of Chukotka owns the remaining 25% stake in the project.
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