KazMinCo confirms Nurkazgan deposit

A prefeasibility study completed for Kazakhstan Minerals (KMC.U-T) has confirmed the resources of the Nurkazgan copper-gold porphyry deposit in central Kazakstan.

The study outlined a resource of 213 million tonnes grading 0.81% copper and 0.26 gram gold per tonne using a 0.4% copper cutoff. The portion of the deposit considered exploitable by open-pit methods consists of 108 million tonnes grading 0.88% copper and 0.28 gram gold per tonne, for contained totals of 2.1 billion lb. copper and 0.96 million oz. gold. The deposit remains open at depth.

A daily production rate of 20,000 tonnes has been envisaged using open-pit methods to a depth of 650 metres below surface. The waste-to-ore ratio is estimated at 6 to 1, with pit slopes of up to 51.5 within the igneous rock.

Some 260 million tonnes of material must be prestripped at an estimated cost of US$180 million.

The recommended processing involves primary crushing, then semi-autogenous grinding and ball milling followed by flotation. This will produce a bulk concentrate containing 25% copper, 7 grams gold and 46 grams silver per tonne. Plans are to send the concentrate by rail for toll smelting at existing facilities within Kazakstan.

Metallurgical recoveries for copper and gold are 91% and 71%, allowing an annual production of about 123 million lbs. copper and 44,000 oz. gold.

The estimated initial capital cost for prestripping, mine construction and equipment is US$348 million. Operating costs, including smelting and refining charges, are estimated at US67cents per lb. copper, net of gold and silver credits. The mine life will be at least 15 years, with payback estimated in the tenth year.

The study was performed by consultant Mineral Resources Development (MRD) of San Mateo, Calif., with assistance from Golder Associates and Hazen Research.

MRDI based its report on 59,000 metres of diamond drilling in 140 holes at a spacing of about 100 metres by 75 metres. Of this total, KazMinCo drilled 73 holes totalling 37,000 metres between April 1995 and May 1997.

Issues that require further examination at Nurkazgan include: drilling to test for additional near-surface resources; grind sizes; the heap leaching and processing of sub-economic material; feasibility of a

single-point-discharge tailings facility; increasing pit-slope angles; and contracting arrangements.

KazMinCo will also examine the possibility of bulk, underground mining of a 34-million-tonne resource grading 1% copper and 0.4 gram gold, delineated mostly below the excavated pits at a depth between 650 metres to 1,200 metres.

About 1.5 km to the northwest of the Nurkazgan deposit lies a 700-metre-long zone of gold mineralization, known as the Northern deposit, which is hosted within a series of shear structures. A 40-hole, 6,000-metre diamond drill program has been completed over the zone and the preliminary resource amenable to open-pit mining has been pegged at 20 million tonnes grading 1.4 grams gold per tonne and 6 grams silver, using a cutoff of 0.5 gram gold.

Metallurgical testing of the material shows gold recovery of 92% after a 16-hour carbon-in-leach treatment.

In addition, exploratory drilling 2 km northeast of the proposed Nurkazgan pit, near the Northeast intrusive, has intersected near-surface copper mineralization.

Further studies of development at Nurkazgan will examine the possibility of including the exploitation of these two satellite deposits.

KazMinCo holds an 88.5% interest in the Nurkazgan deposit, which was formerly known as Samarskoye.

At KazMinCo’s 86%-owned Varvarinskoye project in northern Kazakstan, an ongoing final feasibility study is due in May.

The company has also recently acquired a 40% interest in three oil fields in western Kazakstan with an estimated 72 million barrels of recoverable reserves.