Centerra inches toward Mongolian investment agreement

Centerra Gold (CG-T, CAGDF-O) has officially registered its Gatsuurt ore reserves with Mongolia’s National Registry of Mineral Reserves, a move the company says will bring it one step closer to negotiating an investment agreement.

The announcement follows news in late November that the Mongolian government had started to review the project’s reserves and feasibility study.

Recently, the Mongolian government has made some statements that suggest it wants to reassure foreign investors. In an inaugural address to Parliament on Dec. 13, new Prime Minister Sanj Bayar identified the development of natural resources as one of his pre-election priorities.

Gatsuurt has an open-pittable indicated resource of 18.6 million tonnes grading 3.1 grams gold for 1.8 million oz. gold. It has been drilled to a depth of 200 metres.

The Gatsuurt deposit consists of disseminated and vein-style gold mineralization in volcanic, granite, and metasedimentary rocks in two geographically separate central and main zones.

Quartz veins with visible gold were first discovered at Gatsuurt in 1997 in the placer bedrock floor and boulders of altered granite. Disseminated arsenopyrite and pyrite were also noted in the placer debris.

Centerra plans to truck ore from Gatsuurt 35 km to its producing Boroo gold mine. The company will build a bio-oxidation circuit at Boroo for Gatsuurt’s oxide and refractory ore.

In a technical report filed in May 2006, Centerra said it planned to operate the Gatsuurt mine at a rate of 35,000 tonnes per day (ore plus waste), which will release enough ore to run the Boroo mill at a rate of 4,800 tonnes per day.

The Boroo open-pit mine, which has been operating since March 2004, is 110 km northwest of Ulaanbaatar, Mongolia’s capital.

While relatively remote, a paved, all-weather highway linking Ulaanbaatar and the Russian city of Irkutsk passes within 3 km of the Boroo mine site.

The main Trans-Mongolian railway, which connects Ulaanbaatar with Irkutsk and Beijing, runs through the city of Baruunkharaa, about 20 km north of Boroo.