Rothschild helps Goldbelt raise funds

In concert with efforts to raise funds for its tailings project in Kazakhstan, Goldbelt Resources (VSE) recently appointed N.M. Rothschild as its financial adviser.

Under the terms of the agreement, Rothschild will assist the company in securing debt financing for the project’s estimated US$40 million capital cost.

Goldbelt, through the acquisition of a Luxembourg-based company, has a 50% interest in the project.

The Kazgold project encompasses four tailings deposits generated over a period of 70 years from an existing base-metal mine and flotation plant. A feasibility study by Minproc Engineering of Australia concentrated on two of the deposits, outlining 2.5 million tonnes grading 2.47 grams gold and 19.88 grams silver per tonne in one deposit and 85.0 million tons grading 0.66 grams gold and 4.41 grams silver in the other.

In the base-case study, only ore from the higher grade deposit is reground while a second study assumes the ore from both deposits is re-ground. Both cases assume an operating rate of 1,000 tonnes per day.

Based on blending seven tonnes of low grade with one tonne of high grade the base-case study estimates capital costs at US$40 million, recoveries at 65% for gold in the high-grade deposit and 55% for the low grade. Silver recoveries are estimated at 45% for both deposits.

Operating costs for the base case were estimated at US49.3 cents per tonne for milling and about US15.6 cents per tonne for mining or a cash operating cost of about US$1.25 per gram (less than US$50 per oz.) during the first few years before the high-grade deposit is depleted.

Following the depletion of the high-grade reserve in the third year of operation, costs per gram increase to about US$1.79 per gram not including silver credits.

In its calculations, Minproc bases its operating cost estimates on local cost structures which are considerably lower than western costs, primarily as a result of lower labor, fuel, and material costs. The capital cost estimate is based on international standards.

Based on western or international industry costs, milling costs for the base case are estimated at US$2.47 per tonne and mining costs at about US41 cents per tonne.

This puts operating costs at about US$5.54 per gram (US$190 per oz.) during the initial two years, increasing to about US$7.93 per gram in the third year when the high-grade deposit is exhausted.

Once Goldbelt has secured the capital funding, the company estimates it will take about 19 months to complete construction of the processing facility and related infrastructure.