Vancouver — The much-anticipated Kupol feasibility study, which was conducted mostly in-house by
Vancouver-based Bema Gold aims to fast-track Kupol, while it continues to explore the property’s Main Vein in an effort to upgrade and expand indicated and inferred resources. Bema is earning a 75% interest in Kupol from the government of Chukotka.
The feasibility study was prepared in-house, with personnel from an assortment of engineering firms, including Orocon, AMEC Americas, and Thyssen Mining. The study envisages simultaneous mining from surface and underground.
Over the first three years, the mill would process some 1,000 tonnes per day of open-pit ore, along with 2,000 tonnes per day from underground. After the third year, the mill would process around 2,750 tonnes per day from underground and another 250 tonnes from stockpiles.
The capital cost of building Kupol has risen by 7% over last year’s preliminary economic assessment, mostly owing to higher steel and fuel costs. Total cash costs tally to US$88 per oz. gold.
The plan to move underground in the beginning prevented costs from rising further, owing to the expenses associated with surface mining. The open pit was originally planned at a stripping ratio of 20:1, which has since been reduced to 12:1.
The estimated US$364 million capital cost of the project includes US$288.2 million for mine-site facilities and development, US$36 million for mining equipment and US$39.8 million in working capital.
Recoveries average 93.8% and 78.8% for gold and silver, respectively.
If all goes as planned, by 2008, Bema could be churning out 552,000 oz. gold and 5.86 million oz. silver annually over 6.5 years from the planned 3,000-tonne-per-day operation.
Milling would involve a primary crushing and gravity circuit, and include conventional gravity technology followed by whole-ore leaching. Gold and silver dore bars would be produced via Merril- Crowe precipitation.
Camp expansion, road construction and site earth works are now under way.
The feasibility study is based on an estimated indicated resource of 6.4 million tonnes containing 4.2 million oz. gold at an average grade of 20.3 grams gold per tonne and 53 million oz. silver at an average grade of 257 grams.
Assuming US$400 gold and US$6 silver prices, the study estimates a probable reserve of 7.1 million tonnes containing 3.85 million oz. gold at an average grade of 16.9 grams gold, and 48.76 million oz. silver at an average grade of 214 grams.
The project’s net present value, at a zero discount, is estimated at US$730 million and US$430 million at a 5% discount over its life. Payback is estimated at 18 months.
If inferred resources are included, mine-life nearly doubles to 12 years.
“In our mind, inferred resources at Kupol are extremely valuable because they are proximal to, and essentially part of, the Main Vein and therefore with little effort can be moved to indicated which will result in higher reserves,” says Bema President Clive Johnson.
Inferred resources now stand at 4 million tonnes averaging 12.4 grams gold and 171.4 grams silver per tonne for 1.6 million contained oz. gold and 23 million contained oz. silver.
More in-fill drilling is under way. Plans call for some 45,000 metres of exploration and in-fill drilling, with six rigs currently testing the property.
On the exploration front, Bema continues to meet with success while exploring along strike of the North Extension zone. Step-out hole 5-456, 100 metres north of the last mineralized hole, intersected 28.33 grams gold and 245.7 grams silver over 13.6 metres (true width of 8 metres).
So far, Bema has spent some US$70 million on Kupol drawing on a $100 million bridge loan facility from two European banks. The company says it’s in talks with bankers regarding a project loan facility, which would in part help pay back the bridge loan.
Bema operates the Julietta underground gold-silver mine located in Far Eastern Russia, where total costs came in at US$234 per oz. in 2004.
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