Highland Gold Mining Limited (“Highland Gold” or the “Company”) announced details of a Scoping Study, compiled together with consultants SRK, which indicates positive economics for the Unkurtash project (for more details see here).
Located in the Republic of Kyrgyzstan in Central Asia, the Unkurtash license area covers three well-explored deposits – Unkurtash, Karatube and Sarytube – with previously-published JORC-compliant mineral resources (measured, indicated and inferred) of 3.5 Moz of gold at 1.82 g/t (IMC Montan, 2013). The project is situated in an area that already features operating mines and has access to paved roads, power and water supply.
Scoping Study highlights:
- 18-year life of mine with annual production of ~133k ounces.
- NPV of US$ 200 M at a 10% discount rate, and an IRR of ~19% assuming a long-term gold price of US$ 1,200/oz.
- Estimated average operating costs of $616/oz.
- Mining plan envisioning two open pits of similar size.
- Processing plant utilizing gravity concentration and gravity tailings CIL with an annual throughput of 4 million tonnes and recoveries of over 80%.
- Capital expenditures for project development pegged at US$ 322 million.
Highland Gold acquired 100% of Unkurtash from Barrick Gold in 2006 and has since spent US$ 38 million on extensive exploration of the site. Local-standard (GKZ) reserve estimates and a local-format pre-feasibility study have already been submitted to and approved by Kyrgyz regulators.
The Company is considering various alternatives for proceeding with the project, including partnering with another strategic investor to co-develop Unkurtash.