Placer, Barrick to evaluate Sukhoi Log

Two major Canadian mining companies have been awarded licences to study the Sukhoi Log gold deposit in northeastern Russia.

Placer Dome and Barrick Gold have until Christmas to study the deposit in anticipation of the government’s 49% share being offered for tender at the beginning of 1999. The licence enables both companies to ship samples from Sukhoi Log outside of the country for evaluation.

Johannesburg Consolidated Industries (JCI), which acquired a Russian company that once held the licence to mine the deposit, is also evaluating the project.

In 1975, Russian geologists estimated the deposit to contain 1,100 tonnes of gold grading 3 grams per tonne. The deposit also contains 250 tons of platinum, which could prove attractive to potential bidders. Government geologists have described the deposit as shallow with good recoveries.

Meanwhile, Western Mining Corp. (WMC) of Australia says talks with Uzbek authorities to place the Zarmitan gold deposits back into production are progressing.

WMC is prepared to begin a feasibility study for the project, which comprises the Zarmitan and Guzhumsay deposits. However, the Uzbek government has been pressuring the company to sign a joint-venture agreement, threatening to revoke its rights there if it does not do so. WMC had begun a final feasibility study earlier this year, but this was suspended in light of weak metal prices. The government says it will negotiate with other companies to develop the deposit if WMC does not sign the agreement and begin a feasibility study by year-end.

The deposits, the mining rights to which WMC secured in a tender process in 1996, are estimated to contain 21 million tonnes grading 10 grams gold per tonne.

A preliminary feasibility study has been drafted, outlining a gold recovery plant with an annual capacity of 2 million tonnes. Overall project costs are pegged at US$170 million.

WMC says it views the Zarmitan deposits as highly attractive, and intends to work out an agreeable schedule with the government.

— With files from Interfax News Agency.